Business Updates: Head of Instagram Testifies Before Senate Panel
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WASHINGTON — Adam Mosseri, the head of Instagram, is appearing before a Senate panel on Wednesday afternoon to defend the social media app from growing bipartisan outrage over its reported harms to young users.
It is Mr. Mosseri’s first appearance before Congress. He is the highest-ranking official from Meta, the company formerly known as Facebook and the parent company of Instagram, to testify to lawmakers after a whistle-blower leaked internal research that said Instagram had a toxic effect on some teenagers.
“Facebook’s own researchers have been warning management, including yourself, Mr. Mosseri, for years,” Richard Blumenthal, Democrat of Connecticut and chair of the Senate Commerce Committee’s panel on consumer protection, said at the start of the hearing. “Parents are asking, what is Congress doing to protect our kids and the resounding bipartisan message from this committee is that legislation is coming. We can’t rely on self-policing.”
Lawmakers are expected to grill Mr. Mosseri about the research, which showed that a third of teenage girls said the app made them feel worse about their body image. He will probably also be questioned about the app’s underlying technology and whether it sends young users into rabbit holes of more dangerous and harmful content. Republican and Democratic lawmakers say they will also confront him about the safety of young users, including the company’s efforts to keep underage users off the site.
At the beginning of the hearing, Mr. Mosseri said Instagram has a positive role in the lives of teenagers, such as by helping young users establish connections during difficult times. He also recognized the skepticism among members of Congress toward Meta.
“I recognize that many in this room have deep reservations about our company,” Mr. Mosseri said, “but I want to assure you that we do have the same goal. We all want teens to be safe online.”
On Tuesday, Instagram announced new safety features for children. Mr. Mosseri noted those changes, which include tools like a “take a break” feature that is meant to help limit time spent online. (TikTok has a similar function that appears when users are spending too much time on the app.)
Mr. Mosseri, 38, is a longtime executive at Facebook and considered a close lieutenant of the company’s chief executive, Mark Zuckerberg. He joined the company in 2008 as a designer and gradually rose in the ranks to run the News Feed, a central feature of the Facebook app.
In October 2018, he was named head of Instagram, weeks after the sudden resignations of the app’s founders, Kevin Systrom and Mike Krieger.
This is the fifth hearing by the Senate consumer protection subcommittee on protecting children online, and executives of TikTok and YouTube have already appeared. But Instagram became the focus of lawmakers after a former Facebook employee, Frances Haugen, leaked internal research that showed some troubling findings about the toxic role Instagram plays in the lives of young users, particularly teenage girls.
Richard Blumenthal, the chair of the subcommittee and a Democrat of Connecticut, has said his office had received hundreds of calls and emails from parents about their negative experiences with Instagram. One parent recounted how her daughter’s interest in fitness on Instagram led the app to recommend accounts on extreme dieting, eating disorders and self-harm.
Mr. Blumenthal has homed in on the algorithms that push such recommendations.
Lawmakers, including Mr. Blumenthal and Ms. Blackburn, have proposed stronger data privacy rules aimed at protecting children, greater enforcement of age restrictions and the ability of young users to delete information online.
A federal appeals court delivered a last-minute reprieve to Apple on Wednesday, agreeing to the company’s request to delay a legal order requiring it to make policy changes to its App Store that could help app developers circumvent what they say are unfair fees.
If the appeals court had not ruled, Apple on Thursday would have had to start allowing companies to include links within their apps directing customers to outside websites where they can pay for those companies’ services or subscriptions. That would have prevented Apple from taking a cut of up to 30 percent on those transactions.
The order was initially made in September as part of the verdict in a yearlong court case between Apple and Epic Games, the creator of the popular video game Fortnite. Epic sued Apple, accusing it of engaging in anticompetitive behavior that harmed developers and consumers through its fees and strict App Store rules.
In a brief document, three judges on the U.S. Court of Appeals for the Ninth Circuit wrote that Apple could wait to make any changes until the appeals process for the Epic lawsuit concluded, which could take more than a year.
The ruling adds another wrinkle in a lengthy legal battle over whether app developers have the right to inform their customers about ways to pay for their services outside the App Store.
After a three-week trial in May, Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California in Oakland ruled largely in Apple’s favor, saying the tech giant was not a monopolist.
But she did say Apple was violating California competition law with its so-called anti-steering provision, which blocked developers from telling their customers about ways to pay outside the App Store. Judge Gonzalez Rogers ordered Apple to drop the anti-steering rule by December.
Apple appealed the verdict in October and requested a stay of Judge Gonzalez Rogers’s injunction about the anti-steering rule until the appeals process played out. She denied the company’s request in November, but the federal appeals court disagreed with her.
“Apple has demonstrated, at minimum, that its appeal raises serious questions on the merits of the district court’s determination that Epic Games Inc. failed to show Apple’s conduct violated any antitrust laws but did show that the same conduct violated California’s Unfair Competition Law,” the judges on the appeals court wrote. They added that Apple had also “made a sufficient showing of irreparable harm” to the App Store if it was forced to make policy changes.
In a statement, Apple thanked the appeals court and reiterated its argument against tweaking its strict App Store rules. “Our concern is that these changes would have created new privacy and security risks and disrupted the user experience customers love about the App Store,” the company said.
Epic Games declined to comment.
With Wednesday’s ruling, Apple bought some time, but it could ultimately have to comply with Judge Gonzalez Rogers’s order if it loses on appeal.
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SAN JOSE, Calif. — It lasted less than three weeks, centered on one person’s testimony and spanned topics such as financial projections, private jets, falsified documents and intimate partner abuse.
On Wednesday, lawyers for Elizabeth Holmes, the founder of the blood testing start-up Theranos, concluded their defense in her fraud trial. She was the final witness and, after spending seven days on the stand, her testimony ended abruptly on a question about justice.
“You understand they were entitled to truthful answers about Theranos’s capabilities?” Robert Leach, an assistant U.S. attorney and a lead prosecutor, asked Ms. Holmes, referring to Theranos’s investors and patients who are at the heart of the case’s fraud charges.
“Of course,” Ms. Holmes said.
The end of her defense marked the final stages of a trial that has lasted nearly four months and captivated the public as a referendum on Silicon Valley’s start-up culture. Ms. Holmes, 37, faces 11 counts of fraud related to claims she made to investors and patients about Theranos, which collapsed in scandal in 2018.
Next, lawyers from both sides of the case must agree on a set of jury instructions before delivering their closing arguments, which will begin Dec. 16. Then the jury will begin deliberations for a verdict in the case, which stands out because so few technology executives face criminal fraud charges.
Who’s Who in the Elizabeth Holmes Trial
Erin Woo📍Reporting from San Jose, Calif.
Who’s Who in the Elizabeth Holmes Trial
Erin Woo📍Reporting from San Jose, Calif.
Elizabeth Holmes, the disgraced founder of the blood testing start-up Theranos, stands trial for two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Here are some of the key figures in the case →
Ms. Holmes’s testimony made up the bulk of her defense. For seven days, she pointed blame at others for the failure of Theranos and its blood testing technology. She said that her words were misconstrued and that she had believed Theranos devices worked. She said she had concealed certain information about Theranos because it was a trade secret. And she focused on Ramesh Balwani, her ex-boyfriend and business partner, who she said was responsible for overstated financial projections and problems in Theranos’s lab.
Mr. Balwani, who is known as Sunny and is roughly two decades older than her, had also been controlling and abusive, Ms. Holmes testified. He had prescribed her schedule, diet, self-presentation and who she could see, she said. He also forced her to have sex with him, she said.
When asked how that affected her work at Theranos, Ms. Holmes said it was difficult to separate where his influence began and ended. In legal filings made before the start of the trial, Mr. Balwani strongly rebutted allegations of abuse.
But Ms. Holmes also acknowledged making mistakes. She added the logos of pharmaceutical companies to validation reports that she sent out to investors, which led them to believe the drug companies had endorsed Theranos’s technology. She said she regretted the way she handled a Wall Street Journal exposé with private investigators and legal attacks on former employees who had spoken to the journalist. And she acknowledged allowing incorrect information to be disseminated in a positive Fortune cover article about her.
Ms. Holmes concluded her testimony with a speech about her intentions in pitching Theranos to investors, patients and the press.
“I wanted to convey the impact,” she said. “I wanted to talk about what this company could do a year from now, five years from now, 10 years from now. They weren’t interested in today or tomorrow or next month, they were interested in what kind of change we could make.”
It was all meant to support the defense’s main argument, as outlined in opening statements made in September. Ms. Holmes, her lawyers said, made mistakes. But her mistakes were not a crime. She was naïve and ambitious, they argued, but never meant to deceive.
“Theranos didn’t see mistakes as crimes, they saw them as part of the path to success,” Lance Wade, one of Ms. Holmes’s lawyers, said in his opening statement.
In cross-examination, prosecutors sought to dismantle Ms. Holmes’s excuses. They noted that Theranos had shared plenty of other trade secrets with its partners, which signed nondisclosure agreements. He pointed out times that Ms. Holmes allowed false and misleading information about Theranos to spread to investors and patients.
Earlier in the trial, during testimony from 29 witnesses called by prosecutors, Ms. Holmes’s lawyers sought to poke holes and create confusion around the facts of the case. They attacked the credibility of investors, trying to show that they should have done better research on Theranos before investing to understand the risks and the details of its business. And they tried to argue that patients who testified that they received troubling blood test results from Theranos were not qualified to interpret them.
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Americans continued to leave their jobs in high numbers as the labor market grew hotter this fall, a sign the economy has maintained its momentum despite the pandemic.
The Labor Department said on Wednesday that 4.2 million people quit their jobs in October, a decline of about 205,000 from September but still close to a record high.
Job openings rose 431,000 to 11 million, paced by a 254,000 jump in the accommodation and food services industries. These sectors were pummeled by the pandemic but have recovered a bit as cases caused by the Delta variant of the coronavirus showed signs of easing in some places. The number of job openings was also close to a record high.
The data was collected well before the emergence of the Omicron variant. Still, the level of turnover in the labor market suggests that job seekers have more power and greater prospects than they have had in many years. Most economists expect hiring to remain healthy in the months ahead.
“The pickup in openings does seems to be driven by a slowdown in coronavirus cases,” said Nick Bunker, the director of economic research at Indeed Hiring Lab. “While quitting levels were down in October, they still remain higher than they’ve been in quite some time. Right now, we are in a labor market that is hot, and bargaining power is more tilted toward job seekers than in the recent past.”
Hiring has been volatile at restaurants and bars and in the travel industry, waxing and waning along with the virus. If the Omicron variant turns out to be as disruptive to normal life as Delta was, it could undermine those gains.
Last month, employers added only 210,000 jobs, well below the 546,000 jump in October. But the unemployment rate, which is based on a separate survey of households, dropped to 4.2 percent from 4.6 percent.
The huge number of open positions, and the falling unemployment rate, underscore why many companies have been complaining that they can’t find enough workers. That has been pushing wages higher, especially in lower-paid fields where salaries were stagnant for years.
Average hourly earnings for nonsupervisory workers were up 8 cents in November, to $31.03, and were 4.8 percent higher than a year earlier, according to the Bureau of Labor Statistics.
The rise in wages, along with a surge in prices, has focused attention on the potential threat of inflation.
Policymakers, including Jerome H. Powell, the Federal Reserve chair, still maintain that the price increases mainly reflect pandemic aberrations that will dissipate. But in congressional testimony last week, Mr. Powell signaled that the central bank could pivot from stimulating growth to keeping a lid on prices.
While the federal minimum wage is just $7.25 an hour, in many metropolitan areas employers say it’s hard to find workers for less than $15 an hour. Help wanted signs dot stores and restaurants in many places, and workers have more say in what benefits they receive or how much vacation they can take.
“It’s not just quitting for the sake of quitting, it’s quitting to find better employment,” said Gregory Daco, the chief U.S. economist at Oxford Economics. He expects employers to add 300,000 to 350,000 jobs per month in 2022.
But Omicron will cast a shadow over the economy over for the next few months, Mr. Daco added.
“We know that prior waves have been damaging in terms of economic activity,” he said. “We don’t know yet for certain, but it seems undeniable that Omicron will be a negative on economic activity over the winter.”
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The federal government’s top auto safety regulator said on Wednesday that it had begun looking into a new feature in Tesla cars allowing drivers to play video games on a large touch-screen while the vehicles are moving.
“We are aware of driver concerns and are discussing the feature with the manufacturer,” the National Highway Traffic Safety Administration said in a statement.
The video game feature was included in a software update Tesla released over the summer. The agency issued its statement after The New York Times reported that auto experts were concerned that the games could pose a safety risk by distracting drivers.
News of the safety agency’s inquiry was first reported by Bloomberg News.
Tesla has offered video games on its touch-screens, which dominate the dashboards of its cars and are used to control many aspects of the vehicles, for several years. But the original set of games could only be played while the car was in park. An over-the-air update this summer added solitaire and two other games that can be played by a driver or by a passenger in full view of the driver, raising questions about safety and the potential for distracting drivers from the road.
“Distraction-affected crashes are a concern, particularly in vehicles equipped with an array of convenience technologies such as entertainment screens,” the safety agency said. “The Vehicle Safety Act prohibits manufacturers from selling vehicles with design defects posing unreasonable risks to safety.”
Some safety experts have criticized Tesla’s Autopilot system, which can steer, slow, and accelerate a car on its own and has few safeguards to ensure drivers keep their hands on the steering wheel and eyes on the road. At least 12 traffic deaths have occurred since 2016 involving Tesla vehicles operating in Autopilot mode where hands-free driving and drivers’ inattention were cited as likely causes, according to data from the safety agency.
Tesla appeared to be aware the new games can be played while the car is in motion. A warning shows up on the screen before the game starts that reads, “Solitaire is for everyone but playing while the car is in motion is only for passengers.” The system asks for confirmation that the person seeking to play the game is a passenger, but there is nothing preventing drivers from clicking the button and starting a game.
The company did not respond to a request for comment.
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The chief executive of the mortgage lender Better.com has apologized for the way he laid off about 900 employees over Zoom last week, saying that he “blundered the execution.”
In a letter to employees dated Tuesday, the executive, Vishal Garg, wrote that he failed to show the “appropriate amount of respect and appreciation” for those who were laid off. “In doing so, I embarrassed you,” he wrote in the letter, which was published on Better.com’s website.
Last week, Mr. Garg announced over a Zoom call that about 9 percent of the staff would be laid off.
“This is the second time in my career I’m doing this and I do not — do not want to do this,” he said in the call, recordings of which were widely shared online. “The last time I did it, I cried. This time I hope to be stronger.”
He said employees were being laid off for reasons including the market, performance and productivity. “If you’re on this call you are part of the unlucky group that is being laid off,” he said. “Your employment here is terminated effective immediately.”
Better.com did not respond to a request for comment on Wednesday, or to questions about Mr. Garg’s remarks to employees.
Last week, after the Zoom call, Mr. Garg told staff who had not been laid off in a separate call that he regretted not making layoffs earlier, according to a manager, speaking on the condition of anonymity for fear of retribution, who was on the call and who left the company voluntarily. Mr. Garg said on that call that he would be closely monitoring the productivity of those who remained and those who underperformed would be let go.
As anger over the layoff announcement grew, Mr. Garg began responding to criticism in a series of messages on the networking site Blind under the username “uneducated,” Fortune reported last week.
“You guys know that at least 250 of the people terminated were working an average of 2 hours a day while clocking in 8 hours+ a day in the payroll system?” he wrote. “They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated.”
Fortune said he later confirmed in an interview that he was the user behind the account.
In his apology letter to employees on Tuesday, Mr. Garg said that he was grateful for their accomplishments and acknowledged that the manner in which he announced the layoffs made the situation worse. “I am deeply sorry and am committed to learning from this situation and doing more to be the leader that you expect me to be,” he wrote.
Better.com, which is backed by SoftBank, is a mortgage lender for home buyers seeking rates, loans and other resources, and is licensed to underwrite mortgages in 47 states and Washington, D.C. The company’s mission is to make homeownership “simpler, faster — and most importantly, more accessibly for all Americans,” according to its website.
SoftBank has struggled with some of its investments, including bailing out WeWork, the office-space leasing giant, when it withdrew the 2019 initial public offering and was in danger of bankruptcy. Employees at Better.com have complained previously about toxic executive behavior in the workplace.
Last year, WW International, the company formerly known as Weight Watchers, was also criticized for mass firings over Zoom.
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The chief executives of six cryptocurrency companies are testifying on Wednesday before the House Financial Services Committee about the promises, perils and uses of stablecoins, or cryptocurrencies that are pegged to the value of stable assets such as the dollar.
They include Brian Brooks, the former acting comptroller of the currency under President Donald J. Trump and now the chief executive of the blockchain technology company Bitfury Group; Sam Bankman-Fried, the chief of the crypto exchange FTX; Alesia Haas, the chief of Coinbase’s exchange in the United States; and Jeremy Allaire, the chief of the payments company Circle.
Key to transactions in volatile crypto markets, the market capitalization of stablecoins reached almost $147 billion as of November, a more than 500 percent increase over the previous 12 months, according to the committee’s hearing memo. But they have so far proved not to be backed as stably as some issuers have claimed, raising concerns about a digital bank run that could threaten the wider economy, given current growth rates. Financial regulators last month asked Congress to “act promptly to enact legislation” that addresses these risks.
The hearing called by Representative Maxine Waters of California, the committee’s Democratic chairwoman, is part of a crypto “fact-finding mission” that will help members determine what steps to take next on stablecoins and other cryptocurrency issues, a committee aide said. He declined to provide a timeline for potential legislative action, but acknowledged the possibility it could be imminent, given the concern and urgency expressed by financial regulators.
Some of the executives who are testifying are trying to convince the committee that it is focused on the wrong questions and should be thinking about the bigger picture.
Mr. Brooks said in an interview on Tuesday that American policymakers were too preoccupied with small issues, like whether stablecoin issuers should be granted banking charters and which crypto tokens might be securities, and insufficiently concerned with global primacy and offering investors safe access to the products they want. The co-founder and chief executive of the stablecoin issuer Paxos, Charles Cascarilla, said he looked forward to discussing with policymakers how crypto could make financial services, like settlement times for trades, more efficient and banking more inclusive.
Crypto proponents often argue that blockchain technology allows people to bypass traditional intermediaries and move value around the internet without gatekeepers like banks. That could help bring the 1.7 billion people globally who are excluded from the existing financial system into a new one, they say.
Denelle Dixon, the chief executive of the blockchain payments network Stellar, will make the case that stablecoins were already being used creatively beyond trading and speculation, for example to ease alternative banking services for refugees in Africa. “It’s incumbent upon industry to get folks comfortable with the technology,” she said before the hearing, adding that the event shows lawmakers were ready to engage.
Indeed, Senator Sherrod Brown of Ohio, the Democratic chairman of the Senate Banking Committee, called a hearing on stablecoins for next week. The witness list has not been finalized.
Mr. Brown, a vocal crypto critic, said that he was reviewing responses to a letter he sent major stablecoin issuers and investors that asked about their operations and relationships, citing risks raised by financial regulators. The inquiry was sent to the crypto exchanges Coinbase, Gemini and Binance.US, the stablecoin issuers Circle, Tether, Paxos and Trust Token, and to the stablecoin consortium Centre, which oversees the joint Circle and Coinbase venture.
Mr. Brown said his hearing would be a “step” toward legislation and that he was “working together” with financial regulators, like the Securities and Exchange Commission chairman, Gary Gensler, and Treasury Secretary Janet L. Yellen.
But the senator does not expect the executives at the Wednesday hearing or any other to say much about blockchain or financial inclusion that he has not heard before. Recalling the “financial wizards” who promoted mortgage-backed securities and derivatives ahead of the 2008 financial crisis, he asked, “When are we going to learn?”
Mr. Brown added, “I want responsible innovation, and that means rules.”
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As the country considers its carbon footprint and alternative energy sources, the nation’s airports are turning their unused land, roofs and parking garages into solar farms. Twenty percent of public airports have adopted solar power in the last decade, according to a study last year at the University of Colorado.
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Community solar programs, which allow some utility customers to buy solar power instead of using traditional fossil fuel, are in place at airports in Tallahassee; Tampa, Fla.; and Austin, Texas, among others.
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At Kennedy International Airport, a planned solar array is expected to be the largest in New York State when it is completed next year.
Despite the interest, challenges still remain: Adoption is limited and varies by location, and officials can encounter environmental and bureaucratic hurdles.
Experts say the decreasing price of solar modules and the Infrastructure Investment and Jobs Act allocating $25 billion to airports may lead to more projects, Amy Zipkin reports for The New York Times.
“Solar costs have come down significantly in the last decade,” said Alicen Kandt, senior engineer at the National Renewable Energy Lab. “It becomes appealing in areas that may seem less than ideal.”
Austin-Bergstrom International Airport, which previously installed 84 kilowatts of solar power in the cargo area and 27 kilowatts in the taxi area, recently added more than 6,600 solar panels on a garage roof. City officials entered into a 25-year power purchase agreement with the North American subsidiary of the French multinational company Engie when they realized installing solar panels on the roof instead of steel would cost $2.7 million, saving the airport $1.5 million.
“Solar is cheaper than steel,” said Tim Harvey, a customer renewable solutions manager at Austin Energy, the city’s utility, which signed a power purchase agreement with Engie.
Airports are required by law to be financially self-sufficient, and the prospect of earning extra revenue is a powerful draw for governments. READ THE ARTICLE →
Trading on Wall Street was mixed on Wednesday, with the S&P 500 struggling to find direction after posting its strongest back-to-back gains in a year.
The benchmark index was slightly higher in midday trading, while the Nasdaq composite was up 0.5 percent.
The S&P 500 had jumped more than 3 percent to start the week, rebounding from a string of declines as fears over the Omicron variant of the coronavirus receded. The gains came as early reports suggested the new form of the variant could be less severe than previous strains.
Pfizer and BioNTech said on Wednesday that a third dose of their vaccine provided significant protection against the Omicron variant. That claim was based on experiments done on cells and antibodies in the lab, although researchers cannot say for sure how the vaccines will perform in the real world.
Travel and leisure stocks were among the best performers in the S&P 500, with Norwegian Cruise Line up more than 9 percent, while Carnival Corp. and Royal Caribbean Group gained more than 5.5 percent. United Airlines and Expedia Group were also higher.
Progress over legislation that would raise the debt ceiling is also easing economists’ concerns. The House approved legislation on Tuesday that would settle a path to lift the government’s ability to borrow and avert the threat of a first-ever federal default. Later this week, the government will report its Consumer Price Index, a widely watched measure of inflation, for November.
Oil prices rose slightly, with West Texas Intermediate, the U.S. crude benchmark, up about 1 percent to about $72.75 a barrel.
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Today in the On Tech newsletter, Shira Ovide writes that instead of letting Facebook or Apple decide the norms of new technology, we need to do it.
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President Biden unveiled a plan on Wednesday to make the federal government carbon neutral, ordering federal agencies to buy electric vehicles, to power facilities with wind, solar and nuclear energy, and to use sustainable building materials.
In a series of executive orders, Mr. Biden called on the government to transform its 300,000 buildings and 600,000 cars and trucks, and use its annual purchases of $650 billion in goods and services to meet his goal of a federal government that stops adding carbon dioxide into the atmosphere by 2050.
If implemented, the moves could give a significant boost to the clean energy market, experts said. READ MORE →
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Amazon warehouses around the country stopped operating Tuesday as outages in the company’s cloud computing system took down the technology that powers the company’s logistics operations.
The disruption came during the peak holiday season, with Amazon already dealing with more complicated and expensive logistics during a labor shortage. Usually, Amazon’s share of online sales grows practically each day closer to Christmas. READ MORE →
Source: https://www.nytimes.com/live/2021/12/08/business/news-business-stock-market
