The tech-Washington relationship has a chance at a reboot

Presented by the Competitiveness Coalition: How the next wave of technology is upending the global economy and its power structures

Jun 16, 2022 View in browser   By Derek Robertson Presented by the Competitiveness Coalition With help from Rebecca Kern Mark Zuckerberg speaks during an Oculus launch event. | David Paul Morris/Bloomberg via Getty Images Lawmakers are pushing a data privacy bill. Conservatives are raging against the tech industry's cadre of lawyers. State legislators are getting aggressive about social media moderation (albeit unsuccessfully). The government and the tech industry could potentially be at a breaking point… or at least a very low point in a relationship that for years was pretty hands-off for both sides. But there's also potential for a reset, according to Yonatan Raz Fridman, founder and CEO of metaverse games company Supersocial and co-host of Bloomberg's "Into the Metaverse" podcast. The reset he's talking about would be driven by the metaverse, a potential new online environment requiring massive amounts of investment and cooperation, and whose rules simply haven't been written yet. Raz Fridman is something of a metaverse evangelist who claims that the virtual world is not just a business opportunity, but also has the potential to shake up how government and industry get along. "It makes a lot of sense for these companies to look at the emergence of the metaverse as the next iteration of the internet," he says, "and take advantage of that to cement a new narrative with consumers and with Washington." The metaverse doesn't just represent a potential technological revolution that would change the way we interact online. It's also a locus for regulation, with its wide and varied uses and potentially vast amounts of new kinds of data collection it would enable — and there is a case to be made that Raz Fridman is on to something: that both government and industry are trying to get on the same page in way they decidedly did not in the early days of the current, app-driven web, working together to set hard and fast rules around upcoming issues like fraud, harassment, and privacy. Meta, the company making the most obviously public-facing effort, has relentlessly hyped up the moderation features in its early public spaces, issued voluminous policy communiques, and put an emphasis on child safety features (although it's still unclear how the content moderation issues that have bedeviled social media in recent years would somehow become easier to deal with while wearing goggles.) The XR Association , a trade group founded by Google, Microsoft, Facebook's Oculus and other tech heavy hitters, is working on the Hill to promote the technology's use and adoption. The overall message of a blog post/mission statement from Facebook's president of global affairs (and former UK deputy prime minister) Nick Clegg last month was redolent of the approach by "Washington's favorite tech giant" Microsoft, affirming that they want to work with regulators this time around. That might be an uphill battle given the company's, well… fraught history with Washington. And they'll face opposition from the other direction, as well: new companies hoping to build a decentralized, blockchain-based metaverse aren't likely to give any quarter there to the giants they're trying to supplant. "There's a new wave of creators with a very different perspective from those of the Web2 era," said Raz Fridman, alluding to Web3 proponents' frequently disruptive, almost hostile attitude toward existing tech institutions. "This is going to be a constant struggle and a point of friction… you can't truly take away the 'Facebook' from the 'Meta'."   A message from the Competitiveness Coalition: Don't handcuff American competitiveness with harmful restrictions and regulatory red tape. A conversation about updating regulations is worth having. But empowering the federal government to destroy future American success stories is the equivalent of cutting off our nose to spite our face. The Competitiveness Coalition seeks to educate the public and advocate for light-touch regulation and tax policies that puts consumers first while fostering innovation and attracting new investment. #CompetitivenessCoalition. Learn More   proceed with caution The Federal Trade Commission approved today by a 4-1 vote the publication of a report on the potential use of AI to mitigate online harms like child abuse or financial fraud — the commissioners largely agreeing with its wariness about the technology's unmitigated use by private, unaccountable corporations. Reading from the report, Commissioner Christine Wilson said that "Congress should generally steer clear of laws that require, assume the use of, or pressure companies to deploy AI tools to detect harmful content." The only commissioner to vote against the report's release was Noah Phillips, who said its analysis was too superficial to be useful. The report's fundamental conclusion that the potential risks AI tools pose are at least as big as their potential benefits won't be unfamiliar to those who have been following recent developments either stateside or in Europe. afternoon snack Anna Sorokin during her 2019 trial. | AP If you find something you love doing, you'll never work a day in your life. For Anna Sorokin, the "socialite scammer," that's finding people with excess cash to burn, and relieving them of it by any means necessary — now by way of a collection of NFTs. Sorokin — who's still imprisoned at the Orange County Correctional Facility in New York state, convicted of grand larceny and theft for her years of defrauding banks and wealthy friends by pretending to be a German heiress — has minted 10 NFTs under the title "Reinventing Anna," a play on the recent Netflix dramatization of her story. Sorokin told NBC news that the NFTs will grant holders "exclusive access" to her, including… well, phone calls from the Orange County Correctional Facility, and receipt of undisclosed "personal items." "I'm not this vicious scamming person who's trying to take advantage of anyone who's stupid enough to fall for it," Sorokin told NBC. "Hopefully I'll be given a chance to focus all my energy into something legal." Which her NFTs absolutely are! Despite the refrain of critics, there's nothing inherently scammy about selling NFTs — as long as their creators don't run off with the money, of course. Luckily for Sorokin's potential investors, there's a lengthy public record to check. Caveat emptor.   A message from the Competitiveness Coalition:   The Future In 5 Links Axie Infinity, one of the biggest names in "play-to-earn gaming," has taken a nosedive. Crypto platform Kraken's boss is subjecting his employees to a self-described "ideological purity test." Meta's Quest 2 VR headset is getting parental control options — that have to be requested by the child. A Canadian company has launched a prototype of a new quantum computer. Read a Johns Hopkins cryptographer's response to reflexive crypto skeptics. Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson (drobertson@politico.com); Konstantin Kakaes (kkakaes@politico.com);  and Heidi Vogt (hvogt@politico.com). Follow us on Twitter @DigitalFuture. If you've had this newsletter forwarded to you, you can sign up here. And read our mission statement here.   A message from the Competitiveness Coalition: American entrepreneurs move our economy forward. American politicians should not handcuff homegrown success stories with regulatory red tape – especially at a time when the Chinese Communist Party is trying to boost its own tech companies. Counting 17 small business, consumer, and taxpayer advocate groups , the coalition is focused on preserving American competitiveness and defeating misguided bills such as the American Innovation and Choice Online Act and Open App Markets Act. Bills like these threaten the availability of free and low-cost online products and services that hard working Americans rely on. Liberal leaders in Washington are on the wrong track when it comes to helping average Americans by reducing the cost of living, and these antitrust bills are just another part of their bad plan. The current antitrust bills are Anti-Competition, Anti-Innovation and Anti-Job. Learn More.     Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Konstantin Kakaes @kkakaes Heidi Vogt @HeidiVogt   Follow us

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