Global Tech Policy Bulletin November 2022: From Crypto Drama to Europe’s Chip Crisis
Hello and welcome to Citizen Tech, InformationWeek’s monthly policy roundup. This month, we have to talk about Elon Musk, who is once again facing charges from the SEC over his compensation at Tesla; content regulation on social media platforms around the November US election; fallout from FTX’s collapse, in Congress and the European Parliament; despair over a European flea law; and more.
About Elon: Is he too rich?
Not an ethical question: a legal question. The New York Times reported that the SEC is looking into Musk’s 2018 compensation package as CEO of Tesla. The package stipulated an options package that amounted to $50 billion. The SEC told the Delaware Court of Chancery that Tesla’s board misled shareholders into approving the massive compensation.
Almost five years have passed since the deal in question, and Musk’s stake in Tesla stock has fluctuated since then. Currently, according to the Times, he owns 14% of the company’s stock, which is worth nearly $90 billion. It sold about a third of that sum last year.
Tesla told the court that the 2018 package was justified by Tesla’s performance, was not extreme given subsequent years’ revenue, and did not involve any dishonesty with investors. Musk, at the helm, as Axios reports, claims to “hate” being CEO of Tesla. The Biden administration in general and the SEC in particular have an obvious problem with Musk. They’re in the Mood to Slay Giants: This Month DOJ took Adobe in an ambitious antitrust case. We’ll see if their case against Musk holds up.
Election Day Technology
The US election is all about technology, and not just because of the machines that tally the ballots, the subject of various right-wing fever dreams in the wake of Donald Trump’s 2020 defeat. Major social media platforms have all worked hard to contain misinformation ahead of the November 2022 election, with TikTok banning all political fundraising (via NYT). Meta, owner of WhatsApp, banned ads that discouraged people from voting. YouTube stepped up its campaign against misinformation, not just in the United States but in Brazil, ahead of the election there. Gab, meanwhile, championed freedom of speech and refused to censor any political speech whatsoever.
The effect was difficult to read. Asset taken from facebook after the election to accuse Arizona Democrats of monkeying around with voting machines, and the CEO of My Pillow railed against an alleged “Biden bump.” But the bubbling was telling. However, the very vindictive MAGA propaganda slipped through the cracks – and even though progressive organizations like Media Matters complained about it – no real red wave arrived. There may be limits to this kind of digital election year propaganda.
War Bulletin No. 10
Somebody send that last point to the Kremlin. Russia, short of materiel, short of trained personnel, driven out of Kherson and waiting for the winter frost to catch its breath, is trying what it sees as other, more subtle means of winning the Ukrainian war. Kremlin officers American voters targeted ahead of this month’s elections with implicitly anti-Ukrainian messages, questioning the massive cost of military assistance in a time of inflation and precariousness. Other posts have taken the circuitous route, lashing out at rising violent crime rates and Biden’s progressive excesses. This was not unexpected: the FBI and CISA published a Attention last month about this kind of operation. The question is what made this operation so… lame. We have yet to know if the efforts of old social media platforms are responsible for blunting Russian efforts, or if the populations most vulnerable to these overtures are saturated. In any event, the Kremlin will need a smarter strategy if it wants to transform Americans as it is transforming Europeans and Africans in the Sahel. Federal support for Ukraine continues apace.
Is this the end of crypto?
The Economist asked this question. This month, the FTX cryptocurrency exchange crashed. NBC tells the whole story of the implosion. FTX was a kind of money changer for different cryptocurrencies, but it also worked as a kind of alternative bank, and many users thought that the higher interest earnings on their investments in FTX’s digital wallet would be always higher than the rates of their traditional savings accounts. . Reader, they were not. FTX filed for Chapter 11 bankruptcy this month. 16, 30-year-old CEO, crypto lobbyist Sam Bankman-Fried – what a brutal and fitting name! — Told Voice via Twitter DM that he needed $8 billion “to make account holders whole.” He also admitted that shortly after the filing, someone, possibly a staff member, hacked into FTX and got away with hundreds of millions. It’s a bad look, especially for a lobbyist with a notable disdain for the kind of regulation that central banks and governments around the world would love to throw at crypto bros if they could. Sen. Debbie Stabenow (D-Michigan), chair of the Senate Agriculture Committee dealing with FTX, expressed a combination of embarrassment and silent triumph in a press briefing. “The Committee remains committed to advancing the Digital Products Consumer Protection Act to provide necessary safeguards to the digital product market,” she said. It must also be embarrassing for ranking Committee member John Boozman (R-Nebraska), long considered sympathetic to crypto; she mentions him by name as “working closely” with her.
Maxine Waters (D-California), Chair of the House Financial Services Committee, said that FTX’s collapse caused “considerable harm” and that Bankman-Fried would appear before it at a hearing.
Meanwhile, over time, the European Commission is considering a new crypto-tax. Confidential sources said POLITICS that after losses of $2 trillion in the European crypto market over the past year, a single block-wide tax regime is being discussed. In fact, the fear of FTX and the 2022 losses are just the latest justification for this: secret talks began in Toulouse, apparently, in 2021. Currently, each EU member state sets its own rates and conditions for taxation for cryptocurrency; merchant spokesperson Crypto.com told POLITICO that a new consolidated tax could “bring economic benefits” to the industry.
Can Europe afford chips?
The EU flea law, which would theoretically or better repeat Biden’s CHIPS Act, languishes in committee at the European Parliament; in the meantime, on the Rhine, the Commission cannot afford to continue financing the manufacture of semiconductors. POLITICS suggests that the framework, which would disperse some 43 billion euros of public funds to government and private entities, may have been overtaken too quickly by lawmakers and is now the subject of intense scrutiny in the various bodies of the EU, from the Council to the Parliament . Member state governments are also restless, especially the smaller countries in the bloc. The big manufacturing contracts inevitably go to the big manufacturing countries, like Germany and France (and Italy, where great Catania will soon house a huge factory of silicon carbide wafers). But the Czech Republic, among others, is unhappy: shouldn’t a major European initiative benefit the whole of the European Union?
A number of voices have also pointed out that even though the European chip law is approved by the committee in record time, it is still rather disappointing. He promises 11 billion euros for R&D; Biden’s plan yielded $13.2 billion.
Biden in the Pacific
Biden met with a number of Asia-Pacific leaders at the G20 summit in Bali. On the 13th he meet with the Prime Minister of Japan and the President of South Korea to discuss (among other things) supply chains. Nothing came out of the announcements except platitudes and indirect warnings against North Korea, but semiconductors must not be far from his mind. South Korea produces nearly a fifth of all semiconductors in the world, despite recent productivity declines (via InvestKorea).
A more interesting announcement came a few days later, when he met with the respective prime ministers of Australia and Japan to discuss telecommunications financing across the Pacific Rim. The US International Development Finance Corporation and Japan Bank for International Cooperation each invested $50 million in Telstra’s acquisition of Digicel Pacific. Telstra is a former Australian state company; Jamaica-based Digicel is one of the largest mobile phone networks in the world. Telstra is expected to gain around 2.5 million new subscribers in the Pacific Islands. The invisible actor in this drama is China. All talk of “a stronger Pacific region” boils down to pushing back on Chinese overtures, which might otherwise tempt lawmakers in Samoa, Fiji or elsewhere.
recommended reading
Wired directs a series about hunting down the infamous cybercriminal known as Alpha02. It’s a compelling story, with sinister villains and plenty of drama, but you’ll need Wired credentials. Maybe you’ll find some on the Dark Web…
What to read next:
From Twitter’s New Management to Big Tech Lobbying Scandals
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