Libra is another WhatsApp moment for Facebook and regulators must not let it happen

In 2012 Facebook bought Instagram for $1 billion, and two years later it acquired WhatsApp for $19 billion. Despite initial mockery for what many perceived to be outlandish amounts for startups with zero revenue, these deals turned out to be some of the most important strategic decisions Facebook ever made. The company prevented future competitors (as well as another tech giant from buying them), gained access to massive amounts of additional user data, and – maybe most importantly – it created fallback solutions in case the original Facebook would lose its appeal to people. The positive psychological effect of this cannot be underestimated, because it allowed for entire different forms of risk taking. Instagram and WhatsApp became Facebook’s psychological “safety net”.

WhatsApp and Instagram play a critical role in how the company Facebook got into today’s dominant position. Through at least one (but often two or even all) of these services, the company is entrenched in the daily life of billions of people. At times Facebook already appears too big to fail, considering that the vast number of cases of serious missteps and data scandals that the company has been involved in over the past years haven’t diminished the company’s societal role at all, nor significantly impacted its financial performance. Many people simply feel that they cannot leave Facebook (or WhatsApp, or Instagram).

Today even some market-friendly observers acknowledge that the competition authorities shouldn’t have given green light for the acquisitions of Instagram and WhatsApp. But at their time, the evaluation of whether an acquisition would threaten competition was made solely based on the financial numbers. And since WhatsApp and Instagram didn’t make any money, the regulators didn’t see any major problems.

Now everybody is wiser, and there is widespread understanding that in today’s digital economy, the perspective of antitrust has to change and to adjust to new circumstances and phenomenon.

Facebook’s announced launch of Libra, a “simple global currency and financial infrastructure that can empower billions of people”, is in an important way another WhatsApp moment: It is again Facebook making a move without precedent which doesn’t show any measurable signs of potential anti-competitiveness right now, but which risks massively increasing the company’s entrenchment in the future, making it invincible possibly for decades to come.

Libra is not an acquisition but a joint financial project with about two dozen other tech & payment firms, venture capitalists and some non-profits (presumably to make it look friendlier), so the tools regulators have at their disposal and the entities that could be involved are different ones. Also, I am not a regulation and antitrust expert. My argument therefore is not a legal one. It’s a reminder of how the regulators twice missed putting brakes on Facebook’s expansion when they should have done it, and how Libra likely can turn out to be another watershed moment for Facebook, with far reaching-consequences if not prevented.

My stance is straight forward: Facebook should not be allowed to run, lead or play a significant role in any kind of undertaking which involves the creation of an alternative currency which extends beyond one of its own services, or any other undertaking which will, in the long run, make it harder for consumers to choose alternatives to critical services provided by Facebook or its subsidiaries. And looking at the level of ambition of Libra as well as Facebook’s massive reach, nobody should believe that the goal would be anything else than total domination of the global payments market.

Facebook is already very powerful, featuring multiple layers of lock-in effects. Therefore, for this company, an extreme level of regulatory scrutiny is justified. Because there is such a thing as too big, too powerful. Particularly in the age of algorithms and surveillance capitalism. A lot is at stake. Too much to take this lightly or to let oneself be lured by the appeal of “crypto”.

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In the digital age, cognitive biases are running wild

Here are three strange ways of how the human mind works:

  • If a person with a certain strong belief is presented with clear evidence of the belief being false, this may lead to a reinforcement of the belief.
  • A person might draw different conclusions from the same type of information depending on in what way the information is being presented.
  • A person who has just been told about a phenomenon which he/she never noticed before, starts paying attention to it and now sees it/hears about it everywhere.

These examples of cognitive biases show how easily our perception and thinking is being tricked and led astray. More than a 100 cognitive biases have been identified so far. The Wikipedia list collecting them all is both a fascinating and sobering read.

Considering how flawed our thinking and perception tends to be, it’s hard not to be amazed by humanity’s achievements and how far civilization has come. As cognitive biases affect every single individual no matter their standing, academic credentials, authority or projected confidence, and produces the constant risk of wrong decision-making and subsequent conflicts, the advances and fairly peaceful state in not all, but a large number of societies is against all odds. Continue Reading

Leaving Social Media, one step at a time

After about 2 years of having been mostly inactive on my personal Twitter account, I decided to initiate the next step in my ongoing process to withdraw from Social Media, by deleting 24,300 tweets. It didn’t hurt at all. It feels pretty good actually, although the high number of tweets that I had accumulated since getting “hooked” on Twitter in around 2009 kind of shocked me. It made me realize how much time I’ve spent with the service; and how things have changed. There was certainly a time when I truly loved Twitter. This was before it became a place for polarized, impulsive political and ideological discussions and group think.

A few weeks ago I also finally deleted my Facebook account. It wasn’t such a big step because I already had stopped consuming the news feed and stopped posting way before, also about 2 years ago. Before I deleted the account, I accessed each 3rd party service where I previously had used Facebook as login, and generated a separate login, to make sure not to be locked out later.

Currently I’m working on reducing my Instagram usage. I’ve found somewhat of a primitive hack: When I want to have a look or check private messages, I download the app, browse around for a few minutes, and delete it again.

There are still some aspects of Instagram that I appreciate. It’s a nice way to connect with people one meets for example during travel, or to share some shots from places few people have visited before (= meaning places which I consider at least potentially interesting for others, if I happen to be at such as a place), but that’s it.

I’m still ambivalent about Instagram. But like all other major Social Media services, Instagram is built for distraction and as a way for the company to gain as much user attention as possible. Because Facebook has to make money with Instagram, the experience has gotten much worse lately, in my eyes.

I know some people who appear to be neurologically “immune” against the various habit forming patterns of social media apps. Good for them. I am not, which is why I have to take to radical measures such as deleting accounts.

In some ways, I am cheating a bit: I created a new Facebook Messenger account to be able to keep participating in a few messaging groups. Also I am operating 2 publication-specific Twitter accounts for promotional reasons. Both have a very clear narrow content profile and little activity on my part. In addition, I use Nuzzel to get a quick overview of the articles shared by those I follow with my personal Twitter account.

So am I happier without the major social media services, as several recent studies have been suggesting? No idea. But I don’t miss them at all, I definitely have more time, and it’s easier to focus again. That’s good enough. It also feels great not to contribute anymore to the business models of the giant tech firms which increasingly get into people’s minds and impact the way everybody thinks. I like to think for myself, and to come to my own conclusions, instead of being exposed around the clock to algorithmically-reinforced impulsivity and outrage, mob mentality, dogmatism, moral grandstanding and narcissism. It’s also pleasant to free oneself from the temptation to blare out any impetuous thought through the big digital megaphones that comes to my mind – a behavior which the platforms reward and incentivize. For me, adding some friction in that regard has been a good choice. So has been leaving social media, one step at a time.

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Who will become Europe’s and North America’s “Super App”?

A “Super App” is an app that combines many functions in one single app; the equivalent of a Swiss army knife.

Around the world, tech companies are trying to become a Super App, and are also succeeding.

In China, it famously is WeChat, essentially the inventor of the category.
In Southeast Asia, both Grab and Go Jek are battling to become the region’s major Super App.
In Latin America, Colombia-based Rappi is turning into a Super App.

But who will evolve as Europe’s and North America’s Super App? Facebook Messenger? WhatsApp? A transportation or delivery service such as Uber or Delivery Hero? A FinTech? Will there be national players for particular countries? Or will there be no Super Apps at all, due to the inevitable anti-trust issues or maybe due to lack of demand?

It’s an interesting development to watch.

I love email, more than ever

Yesterday I dropped a package for return at the post office in Stockholm. The person behind the counter asked me: “Do you want the receipt on paper or to your email?”. I chose email. She showed me her smartphone screen where my email address was already filled in and asked me to confirm. I said yes. Done.

It’s 2019 and being offered an email recipe doesn’t sound like rocket science of course, even though this was the first time that I recall I got this option. But while walking home, I couldn’t stop thinking about the greatness of email. Even in 2019. Particularly in 2019.

In a time in which many of the proprietary commercial communication platforms are revealing their dark sides, email is as solid as a rock. It’s available as (ad-financed) free or paid option, it runs decentralized, it is fairly secure, and it’s universally established. It’s far from perfect of course and there are a lot of things that more modern communication tools can do that email cannot (although someone people try to replace Facebook with email) – but the benefits clearly are strong enough to have turned email into “the cockroach of the internet” – to use the words of Slack CEO Stewart Butterfield. It’s the nicest thing anyone ever has said about cockroaches.

Over the years, one frequent type of blog post published by tech heavyweights laments their struggle with managing their emails, often ending in death wishes for this technology.

I however want email to live, to thrive, and to be eternal. Not only because I publish weekly email newsletters (ok, that makes me biased), but also because email offers a huge benefit to every person on this planet with a comparatively little downside for them individually and for society at large. That’s something which cannot be said about most of what came later.

I do love email. And I appreciate it more than ever before.

Losing rider safety when losing Uber

The authorities of Colombia said they are planning to enforce existing laws that could cause drivers of on-demand transportation apps such as Uber and Cabify to lose their driver’s license for a duration of up to 25 years, according to CNN Español. In other words, if you drive for Uber or competitor Cabify (headquartered in Madrid) and get caught, your whole livelihood would be in danger.

This is great news for the country’s taxi lobby and cab drivers, but bad news for riders, whether locals or tourists. For several reasons, taking an Uber in Bogota or Medellín is much wiser than hailing a cab.

Taxis in Medellín protesting against Uber

Locals I met during my travels to Medellín had all bad experiences about taxi drivers to tell, from having been robbed by a driver to having been harassed. Also, many cab drivers possess surprisingly little knowledge of the roads and seem to be unwilling or unable to properly use smartphone apps to find their best way through the traffic (that’s based on my own experience as well as what I have been told by locals). Presumably, the real black sheep are in the minority. Yet, it’s enough for the younger generation of locals who live in areas with good Uber coverage to prefer Uber over taxis. Of course, even using Uber doesn’t guarantee total safety, but thanks to the ratings systems and the driver tracking, the probability of a seamless ride increases significantly.

In addition, the yellow taxis are an easy target for robbers who tend to operate on motorbikes and who threaten passengers at gunpoint to get valuables. While regular cars can be a target as well, when sitting in a taxi, one makes it particularly easy to those looking for a victim.

Furthermore, most taxis in Colombia are rather small vehicles, often without (working) AC, and some are not in the best condition. Generally, the Uber X rides I took happened in cars that were of better standard and size than the average taxi would be.

In the moment in which transportation apps are forced to cease operations in a country such as Colombia, it significantly reduces people’s ability to opt for safety when having to go somewhere.

Other than during travel in developing countries, I personally hardly ever use Uber (nor Taxis). I am in no way an Uber evangelist. But in certain markets, aside from potential savings for riders (which are a more controversial topic, in my eyes) there are undeniable benefits to Uber which – if removed – would make life harder for locals. And naturally, for visitors even more.

How Facebook and Google could collapse

What do Google and Facebook have in common, aside from that they are multi-billion dollar tech giants headquartered in Silicon Valley? Both companies currently experience massive internal tension.

At Google, the issue seems to be particularly related to ideological division (the whole “Google Memo” controversy last year was a clear sign of something bigger bubbling under the surface) and to moral questions about which type of projects the company should engage in or not (e.g., Should it get involved with the Pentagon for development of AI technology? Should it launch a censored search-engine in China?). In addition, many employees are protesting against how accusations and cases of sexual misbehavior and harassment are being handled inside the company.

Facebook doesn’t have the same culture of open, even public dissent as Google (at least from my perspective as an outside observer). However, based on recent media reports, internally tensions are boiling over. No surprise considering the never-ending stream of scandals and revelations of alleged or proven Facebook wrongdoing. It must be tough working at a company which increasingly is being blamed for all the world’s evils; one that evidently has a pretty significant and in parts destructive impact on politics and the public debate.

These internal conflicts might just blow over. But looking at their nature and how much they touch and are fueled by fundamental contemporary issues such as political polarization (this all is happening against the backdrop of Donald Trump, his impact on society and the debilitating strife between progressives and conservatives ), social justice, ethics, surveillance and the limits (and obligations) of capitalism, it’s more likely that things will keep escalating.

Essentially, what’s happening in many Western countries right now is happening inside Facebook and Google: Debates that in many regards are necessary but that have a tendency to polarize and to require a lot of attention.

For these companies’ business, which are built around the principle of moving forward fast (and often ruthlessly), these conflicts are a threat. They make it harder to maintain the pace and level of innovation that shareholders haven gotten accustomed to. They presumably also create internal uncertainty and confusion about what “disruptive” ideas can and should be openly discussed. One can imagine people walking on eggshells, mistrust grows, every little issue turns into a big thing because of existing tensions. Leaks are becoming more frequent, public scrutiny and pressure increases, more controversial decisions and past missteps are being revealed. The stock price is tanking. Morale plunges. Eventually people will look for jobs elsewhere.

And this how Facebook’s and Google’s dominant role could slowly deteriorate, until it collapses entirely.

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Algorithmic survival of the fittest

In Darwin’s evolutionary theory, the concept of survival of the fittest stands for the phenomenon that the traits of life forms that have the biggest reproductive success will, over time, become prevailing, while other traits disappear.

I would like to adopt this framework for the age of algorithms. On the leading tech platforms such as Facebook, YouTube, Twitter, Instagram, LinkedIn and TikTok (gotta be inclusive here), algorithms play a key role in selecting what information people get to see, and who gets to be seen. Since these services’ business models are centered around advertising, their algorithms are optimized for making people spend as much time as possible on them.

Thanks to the vast amounts of usage data generated by billions of daily users as well as the ever-improving capabilities of machine learning (or “Artificial Intelligence”), one has to expect this optimization process to eventually become highly effective, if not truly perfect. Continue Reading

Universal Basic Income and human dignity

Convinced critics of an Universal Basic Income (UBI) often point to the importance of work for human dignity as a major argument against the UBI. The most recent example gave AI pioneer Andrew Ng in this interview:

“Silicon Valley has a lot of excitement about unconditional basic income. I don’t support that. There’s a lot of dignity to work. For someone that’s unemployed I really support the government giving them a safety net with the expectation that they’ll do something to contribute back, such as study, so they can gain the skills they need to re-enter the workforce and contribute back to the tax base that is hopefully paying for all of this.”

But why is the UBI often presented as a dichotomy to working, and thus in consequence as a way to rob people of their dignity?

To me, the way an UBI would have to be constructed and framed is straightforward and very much in harmony with the critical role of work for people’s mental well-being:

An UBI is NOT meant to discourage people to work. It is meant to offer them more freedom to align how they spend their time with their areas of interest and with other life priorities. It is meant to offer more room for calculated risk-taking, as well as the ability to choose work which is deeply meaningful to them, but badly paid (such as helping people in need). And it is meant to remove the most basic existential fears from everyone’s mind, such as homelessness, not being able to buy food or not being able to pay for a necessary health procedure – while at the same time reducing the stigmatization and bureaucracy associated with traditional social welfare support.

The UBI is not meant to enable or encourage people to have a comfortable life without doing any work. Sure, if an individual who receives an UBI chooses to move to the most affordable place in a country, to only eat instant Ramen and to be content with that, good for him or her. But most humans would not be satisfied with that kind of lifestyle, so they’d still have to look for an occupation. However, unlike today, they could do this with a mind freed from the most pressing existential pressure, and maybe they would only choose a 20-hour- or 30-hour-week-job.

So the point of the UBI, according to my view, should be to give people more freedom in regards to their occupational choices. An UBI done right (according to me) would not rob anyone of their dignity.

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What makes iOS 12 very exciting

It doesn’t usually happen that I feel like writing about a new release of iOS, but with version 12 which was just made available by Apple, it does. This latest operating system for the iPhone and iPad could have a groundbreaking effect on user habits and the technology industry large.

These following 3 features of iOS 12 are significant in my eyes and justify a hot take:

  • iOS 12 makes older devices faster
    One of the key features for iOS 12 is performance – and this extends to older devices. I installed iOS 12 on an old iPhone 6s Plus as well as on an iPad Mini (first or second generation, not sure), and they certainly seem to run faster again. If this experience holds true for many others, this could slowly change the prevailing paradigm of having to own a device not older than about 2 years in order to get optimal performance. For some consumers this means that instead of upgrading their phone at least every 2 years, they can wait maybe a year longer  – and instead get an Apple Watch in addition (at least this is what Apple would want them to do).
  • Time well spent features
    Google added features for users to analyze and control their usage and app habits with its latest version of Android, “Pie”, and now Apple follows suit with “Screen Time” (available in the settings section). I played around with it and instantly could see how this will make me waste less time with certain app categories. There appear to be many options for customization as well. Setting everything up properly takes a bit time, so the question is how many users will do it. But let’s say many will, then this can have a profound impact on the app industry: If millions of users for example decide to limit their daily social media budget, the impact might be a significant slump in minutes spent on Instagram, Facebook etc.
  • Shortcuts
    For me, this is the most interesting feature addition to iOS for many years. With shortcuts, owners of iPhones and iPads can connect various actions which previously required separate actions from the users, to workflows that can be triggered at once (for example through Siri). Apps can create their own shortcuts and promote them to their users. But it is also possible to download a dedicated “Shortcuts” app from the App Store and custom-build productivity-enhancing solutions. The latter method requires a rather complex procedure (for being iOS), and I wasn’t spontaneously able to come up with anything useful. In the end, this customization through a dedicated app might remain a feature that’s awesome in theory but attractive for few in practice – or it simply requires a bit of getting used to. I’m now monitoring consciously how I use my iOS devices, to become aware which frequent procedures I might be able to put into a workflow. In any case, I love being able to play around with something like this. It also got me to activate Siri on my iPhone. Having used an Amazon Echo for a while made me realize the potential of voice control, and shortcuts might be exactly what’s needed to turn me into a Siri loyalist, too.

There are some other additions to iOS 12 which I have no opinions about yet. But these three are fantastic, in my eyes. They make iPhones and iPads more fun and potentially more efficently to use, help to spot and kill destructive user habits (Dopamin craving is a curse), and enable more people to use Apple devices – even those who don’t have the means or willingness to constantly upgrade to the latest device or to buy anything else than a used device.

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