President Joe Biden wrote an Wall Street Journal op-ed on January 11, 2023 calling for “serious federal protections for Americans’ privacy.” Digital Content Next CEO Jason Kint tweeted out that “I’ll sit down with anyone to explain why privacy integrated with antitrust is the critical issue of our time” and I took him up on his offer. Kint serves as a sort of industry watchdog for surveillance capitalism companies like Google and Facebook/Meta digging through anti-trust court transcripts, depositions, and other buried legal obscurities as he keeps close tabs on the relationship between the dominant players of advertising and their associated data practices.
I wanted to get some of Kint’s takes on the latest privacy frontiers of US law at the federal and state level, some of the recent $400M GDPR enforcement actions against Meta by Ireland’s Data Protection Commission, and why he’s keeping so close tabs on the anti-trust and the potential anti-competitive practices of Google and Facebook/Meta’s ad businesses. Digital Content Next is a trade organization that represents the future News and Entertainment companies who are advancing the future of trusted content. He has been tracking how the advertising ecosystem has been steadily growing over many years, but mostly to the benefits Google and Facebook/Meta, which he identified was connected to their surveillance capitalism data collection methods that has been providing deep challenges to the fundamental nature of consumer privacy.
The Verge’s Alex Heath recently reported on Meta’s XR roadmap for the next four years, and the quoted Meta’s vice president for AR Alex Himel as saying, ““We should be able to run a very good ads business,” he said. “I think it’s easy to imagine how ads would show up in space when you have AR glasses on. Our ability to track conversions, which is where there has been a lot of focus as a company, should also be close to 100 percent.”
“If we’re hitting anything near projections, it will be a tremendous business,” he said. “A business unlike anything we’ve seen on mobile phones before.””
Meta has long made it clear that it intends to extend it’s advertising business into extended reality, which has been thwarted by Apple’s tracking transparency changes, which has cost Meta billions of dollars in revenue. If Meta is able to control the entire hardware stack on future AR devices, then they’ll potentially be able to unlock even more advertising dollars.
But in this interview, I wanted to get a lot more of the broader context about the relationship between anti-trust and privacy when it comes to the past behaviors of companies like Facebook/Meta and Google. Especially as the structures and forms of surveillance capitalism are modified and adapted for XR technologies that don’t currently have any broader Neuro Rights protections for the right to mental privacy, right to identity, or right to intentional action.
This is a listener-supported podcast through the Voices of VR Patreon.
[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to the Voices of VR Podcast. It's a podcast that's looking at the future of spatial computing and the ethical implications of XR technology. You can support the podcast at patreon.com slash Voices of VR. So continuing on my series of looking at XR privacy, today's episode I have Jason Kent, who's the CEO of Digital Content Next. And so I've been following Jason on Twitter as he digs into all these different antitrust lawsuits and to the underbelly of what's happening with these big surveillance capitalism companies like Facebook slash Meta or Google, tracking some of the larger antitrust legislation. There's this tweet that Jason sent out on January 11th that said, I'll sit down with anyone to explain why privacy integrated with antitrust is the critical issue of our time, helps with downstream concerns across all parties and the public they represent. So this was a provocative tweet, especially after I was coming back from the Stanford University Cyber Policy Center's existing law and extended reality symposium that happened on January 6th. I was in the process of interviewing lots of different people from that conference and unpacking different aspects of privacy and doing this deep dive of trying to understand the broader context of not only the future of privacy and surveillance capitalism and the future potential business models, but also this other aspect of antitrust that's kind of woven in there. And so Jason was making this argument that those two are inextricably connected. And he's coming from, Digital Contact Next is a nonprofit trade organization that is looking at the future of news and entertainment companies. And so he's at the forefront of representing these media companies that have a direct connection to companies like Google or Facebook and Apple. So, I wanted to say one other thing just to help contextualize why it's connected to the future of virtual and augmented reality. Specifically, Alex Heath of The Verge on February 28th of 2023 was reporting on the roadmaps of the future of XR technologies at Meta, and he's quoting Alex Himmel, Meta's vice president of augmented reality. So, Alex Himmel is talking about the future of augmented reality at Meta, and he's saying, We should be able to run a very good ads business," he said. I think it's easy to imagine how ads would show up in a place when you have AR glasses on. Our ability to track conversions, which is where there has been a lot of focus as a company, should also be close to 100%. If we're hitting anything near projection, it'll be a tremendous business," he said, a business unlike anything we've seen on mobile phones before. So the idea is that if they own the whole tech stack when it comes to these augmented reality glasses, then they won't be held back in any capacity for a company like Apple who is having a whole do not track for their platform. So Jason Kent in this interview is talking about how Facebook slash Meta has been long known to be taking a lot of third party data from the back end and using that to drive their ads business. So stuff that's not even happening in the context of their platform. Also, there's different aspects of GDPR and different lawsuits. And yeah, just generally, he's a commentator who's tracking very closely the larger advertising ecosystem in the business model of advertising in the context of these companies. So that's what we're coming on today's episode of Voices of VR podcast. So this interview with Jason happened on Wednesday, January 18th, 2023. So with that, let's go ahead and dive right in.
[00:03:36.267] Jason Kint: Hi Kent. My name is Jason Kent. I am the CEO of Digital Content Next. We're a non-profit trade association for news and entertainment companies and we look at the future of news and entertainment. What are the funding models? How do we preserve trust going into the future in a way that news and entertainment can continue to thrive? Certainly, the large tech platforms, the new distribution channels have been a significant area of focus over the last decade because they are both required at times partners to get news and entertainment to audiences. And also both sources of opportunity and risk and failures in terms of growing trust in the industry.
[00:04:17.602] Kent Bye: Awesome. Maybe give a bit more context as to your background and your journey into doing what you're doing now with working with these different companies and looking in the context of marketing and the impact of big tech.
[00:04:29.110] Jason Kint: Yeah, sure. So I spent almost two decades from the early nineties. Yeah. I've been on the first web browser out of Illinois mosaic. So probably 1993, I think it was until 2013, you know, building and operating and running websites, commercial websites in media, primarily sports media sites. Um, I spent, about 12 years working on companies related to the sporting news and another seven years, seven plus years for CBS running CBS Sports's digital group. you know, that ran from both getting news and information out to producing and streaming some of the largest sports events on the planet, including the super bowl and March madness and masters, et cetera. And so I spent 20 years on the side of operating and running media businesses in the digital world. And then, you know, I'd say the last number of years found myself getting more and more interested in, some of the emerging issues that were coming into play as digital became more and more what we relied on in the future of all ways that we consume media. And in particular, the kind of this intersection of consumer trust and media trust in some of the areas where, where technology was, was both creating opportunity at times was, was eroding that trust and needed to have some ground rules for going forward to make sure that the world can develop in a positive way.
[00:05:58.739] Kent Bye: And you came onto my radar because you've been doing a lot of digging in deep into the different lawsuits of both what's happening with Meta, but also generally different things around the industry, whether it be Google or Apple, antitrust, different types of legislation. And so do you have a background in law at all, or are you just really good at reading some of these different depositions and understanding the bounds of the law and what these big tech companies are doing that may be pushing the limits of what they should be doing?
[00:07:56.996] Kent Bye: So you had a tweet where you said that you feel like antitrust and privacy is one of the biggest issues of today and that you'd sit down with anybody to be able to talk about it. And this is an issue that had been coming for a number of years in terms of privacy specifically, and just the larger impulses of surveillance capitalism and the impact that it has not only on the way that we interface with democracy and our politics, but also what are we losing when these companies are surveilling so much about ourselves. And so I love to hear your general take as to why you see that both privacy and antitrust are the two biggest issues that you're specifically focused on today in the context of what you're doing. Sure. Yeah.
[00:08:36.637] Jason Kint: I mean, I think some of this was starting to get unpacked for us and for me back in 2015, when we started to look at where was the growth advertising, where was the incremental growth going and who was capturing it? And, you know, what we were seeing was that the industry, you know, according to its own association, the IAB was growing at 20% year over year, 25% year over year, and everybody seemed to be happy and celebrating. but most of the participants, particularly the publishers, were not seeing that sort of aggregate growth. And so we started to unpack where was that growth actually going. And what we found out was that, you know, at the time, 90, 95% of the incremental growth in the industry was going to two companies, Google and Facebook. And so that kind of set up the concentration of the digital ad market being an issue. The other aspect to that analysis that never really got discussed early on was the why. Why are they growing and capturing so much of the growth? We connected that early on to their ability to collect and use data across the Internet. Across much of the websites, they had pixels or tags on them. And in the case of Facebook, I think it was over 8 million websites. In the case of Google, it was something like 75% of the top 1 million websites. They were able to see the behaviors and activities across the web and across apps, etc. And then more and more across our lives because we were carrying around devices in our pockets 24-7 that that typically sent them some sort of signal on our location and whereabouts. So there was this intersection between their dominance and the amount of data that they were able to collect and use to micro-target users and so that kind of started to explain the business model. What also was observed was most of the regulations and globally, but in particular in the United States was siloed where you had the antitrust folks and the competition folks on one end, and then you had the privacy consumer protection regulators that would be an entirely different group. And even at the law firms, which many of them work for Google and Facebook, they would have separate practices for antitrust and competition versus privacy. And what became fairly evident is we needed to find a way to integrate those two disciplines because the issues, again, of antitrust and market dominance were not being unpacked and competition wasn't being enforced because the laws didn't really recognize the value and the cost of consumer data and the value of privacy to the individual consumer. And then on the privacy side, you know, it was laser focused on the consumer harm piece and didn't really have any sort of recognition that there were companies that had so much market power that they could force consent onto the user or bundle data across all their services in a way that you weren't able to compete with them as a publisher.
[00:11:48.059] Kent Bye: Yeah, I remember, you know, attending South by Southwest back in the early aughts around 2005. And at the time, you know, there was Craigslist that was having advertising that was taking away advertising from these newspaper organizations. But then over time, I think we started to see how so much of the ad market was being dominated by both Google and Facebook to the point where these publishers were really having to change their practices of how they promoted what they were publishing to fit into the various different algorithms, especially of say, Facebook and their newsfeed and getting audiences to go to their sites. And so maybe you could just give a little bit of that context of how you've seen that And, you know, I think Google is probably the easiest example because they touch on so many of those aspects of the supply chain, if you will, the tech stack and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and,
[00:12:48.838] Jason Kint: And, you know, local news in particular is I think where it's been the most impact and slipping down this slope of falling into the hands of Google and living off of them. And so, yes, if you look back, there was a time where newspapers, you know, had the highest incredible margins and the classifieds business was a big piece of that. And, you know, it's often described as the world might be better that we have more access to more information than just one local newspaper. I get it. But, um, But also the issue is that you've got these local news sites and newspaper sites that came to rely on Google as their discovery engine because Google is upward of 95% of the search market. So for discovery of your content, more and more users were coming to the local news sites through the lens of Google Search. And we can unpack. There's a bunch of issues there. So discovery was through Google. The design of the web, in terms of the way a local news site is designed, and presented to the consumer was more and more influenced by Google. It's even more so than if you remember back in the 90s where we'd have this website is optimized for Internet Explorer or for Mosaic. We don't say that anymore, but most websites are optimized for Chrome and for Google's products, both so that they can crawl the website for search purposes, but also so that it's best presented on Chrome and you even see local newspaper sites now helping Google to get the user to log into Google services that are starting to pop up all over local news sites. And so the web is designed for Google. We already covered that discovery is happening through Google. The dollars that are earned off those local sites are often coming from a monthly check from Google, because Google is the dominant player on the buy side of advertising, the sell side of advertising. exchange that's actually doing the negotiation between the buy side and sell side, which is in itself pretty perverse that you've got buying and selling happening by brokers for advertisers and publishers. And that negotiation is actually happening by Google. So Google is literally the buyer, the seller and the handshake in between. And then they're sending a monthly check to the local news site. So the dollars, the design, the discovery, and then the data, the data is all being collected. by Google and being used to feed into their personalization and ad engines, that they can then treat almost every website as an interchangeable commodity across the web. And they ultimately can determine where the money flows. And so that's incredible power over every aspect of local news. And the issue is that it devalues any sort of uniqueness and original value at the local news level. And also it makes them more and more beholden to Google. So you'll often see the local news operators and their proxies defending Google and defending the needs of Google, which is in itself problematic. And so I think it's a good example is just studying local news, even though as a group in my work, in my association, we have less local news sites than we do national and international.
[00:16:13.317] Kent Bye: Yeah. And so I guess when we tie it back to Facebook and now meta, so, you know, we talked about Google a little bit, but how was Facebook as it comes in? Cause you're talking about search, but there's other aspects of say social media that were also driving traffic. And so we've had different instances where Facebook over the years has inflated different statistics that they have, which has been influencing and changing different dynamics of the ways in which the news organizations or different entities are deciding how to interact with entities like Facebook. And so we talked about Google, but what about meta and Facebook when it comes to the ecosystem and how they may be using data in a similar fashion for what Google's doing?
[00:16:52.279] Jason Kint: Yeah, same sort of business model, even more dependent on micro targeted advertising. because Facebook did not have the first party data, let's call it intentional search data that comes from the users and the dominance of search. Facebook had to rely on and has to rely on explicit data. Either the user enters into it to describe their behaviors and they're either actively by what they're doing on Facebook platform or by entering their own personal data into the platform. But the irony maybe for a lot of people that kind of defies, I guess, conventional wisdom is that, you know, according to regulator reports that we've reviewed, a majority of Facebook's data actually comes from third parties. So they don't actually get it from the platform and the use of the actual platform by a consumer. They get it from third parties that are either onboarding the data, either as advertisers or by pixels and collection of data across apps and the web. That's why I think Apple's moves in privacy have been so disruptive to Facebook because the majority of their data is coming from third parties and so any limitations on third-party data collection become problematic quickly for what they call their signal value or signal loss starts to be created. In terms of the relationship to publishers, and that was describing how Google is so entrenched, Facebook not quite as entrenched. And so you saw publishers be able to push back a little bit or become a little bit resistant to Facebook over the last few years as Facebook started to have troubles as a company. I think publishers have treated them more as a transactional partner, a marketing partner, where they really needed to see the value. before they would sign on to deals. Earlier on, I'd say in the 2012 to 2018 years, Facebook really had a halo on it and that's where much of the growth on the internet was going. If you are a publisher, if you are not participating in Facebook's launches that they would announce every year, then you are missing out. They would throw a bunch of brands up on a screen at their annual conference and that would be where much of the press hype and excitement would go. That's where executives at media companies would either make or break their career by having a good relationship with Facebook and being able to be a part of their launches. there was green pastures and opportunity. A lot of that changed in 2018. At the end of the day, there's still a good portion of the youth and the younger audience out there are active on Facebook's platforms. Publishers need to be able to reach these audiences where they want to be. And the same goes with advertisers. And so as much as the Facebook blue app has had troubles, the Instagram app has been incredibly successful over the last few years. So it's still an important marketing partner.
[00:19:56.449] Kent Bye: Well, I was at the Decentralized Web Summit back in 2018, where Vint Cerf, who works at Google, is one of the founders of the internet. And he works at Google, and I had an opportunity to talk to him about why is he working at Google, where they have an underlying business model of surveillance capitalism. And his response to me was in essence that, you know, how else are you going to give access to all the information in the world to everybody for free? Essentially, it's a business model that is able to sustain these practices. So there's a bit of a sense that I get that companies like Google and Facebook are supporting their businesses by essentially mortgaging our privacy. We have different ways that they're collecting the data, but the exchange on the other end, and if you listen to a lot of what Meta argues when they talk about ethics, they often talk about access and accessibility. They want to make these services available for free, and they juxtapose themselves against companies like Apple, who often charge high premium for a lot of the technology that they have. Yet, Apple has a different business model where they're not necessarily necessarily relying upon user data to subsidize the services that they're providing. So I'd love to hear a little bit of your take of how we've created this entire culture and ecosystem of people who kind of expect things for free, but at the other end, they're mortgaging their privacy in a way that they may not even be realizing. And it's sustaining this larger effort towards surveillance capitalism. And how do you reckon the way that the culture has been conditioned to expect things to be free in a way? and the ways that they have access to these experiences, and what is the new frontier that we may be moving into that may allow us to get beyond the surveillance capitalism model?
[00:21:39.510] Jason Kint: Interesting, really, really interesting question. To your first point about the necessity of data and Mr. Cerf's view on it, and I think this applies to the chief economist at Google too, Hal Varian, I think he's still there. you know, if you look at the economic value of that data and what it unlocks, you can justify almost anything if you're sitting there at one of these companies at Google or Facebook. And, you know, I, I think it's ultimately, you know, I often get into this discussion about, you know, people that have personal contacts at Google or Facebook and say that they're brilliant engineers and great ethics and, you know, when they're trying to, improve the companies and they care a lot about privacy and I don't. I don't question that, but there are guardrails that are around the business model and they use those guardrails as a north star to justify a whole range of business decisions that yes, broadly support surveillance capitalism and justify it by saying it unlocks free services and content across the internet, particularly for folks who can't pay for it. And so, which is a really hard, argument to go up against now, and they don't talk about all the harms that also have come with that, whether that's providing free access in third world nations by subsidizing internet access and having basically Facebook be your entire internet like we've seen in Myanmar and Philippines and other places where it's led to harms. So what the economists will say, and I think this is important to where I think things are going, and I think Apple's kind of signaled their heading as a company, is the agency and control of the individual user is critical. I think GDPR was the first major law that really put that out there, whether or not you believe enforcement is happening or will ultimately happen at the level it needs to. It established this idea that the consumer has agency and they're interacting with what they would legally call a controller. And they can choose the rules about how that controller can process their data. And that gives more agency to the individual user. And that's being mirrored now in other laws, including California's privacy law, which is being updated and I think will be closely in step with GDPR. To the point about the economic value, though, by allowing that user to have control and not letting their data flow horizontally across the web, by not allowing tracking to happen, which is essentially, I don't want a company that I'm not choosing to interact with to have access to my data unless I grant them access explicitly, then that will limit the amount of data on that individual user that flows horizontally across the web. And it will restrict it to the companies they actually choose to do business with or interact with or value for the same reason that we didn't see the economy and GDP like accelerate simply because of the work of Google and Facebook. We won't also see the entire economy slow down. We'll see a reallocation of welfare is what the economists that we at least trust and rely on. And that's what they say. It's not like that. Marketers aren't just going to go away. They're going to find new ways to work within those new rules. That's scary to companies that have built their business off surveillance capitalism. It's probably disruptive for some of the parties that sit in the gray area and follow the current rules. but long-term it gives more agency to the individual user and it puts more economic value on the other end of what the consumer actually trusts and chooses to use on a daily basis rather than the companies that can kind of sit in the background and collect that data.
[00:25:36.902] Kent Bye: Yeah. And Lawrence Lessig in his book, where he talks about what he calls the pathetic dot theory, where he, you have the culture, you have the economy, you have the tech stack, but you also have the laws that are governing all of this. And I think of it as a nested context where at the largest context, you have the earth that we're living on. You have to be in relationship to the earth, but you also have the culture that is driving both the laws that you have, which is then setting the context for the economy, which is then setting the context for the tech stack and the code that we have. in order to drive these user experiences. But at the largest context, you have the culture and you have the people out there. And what I see in some ways is that there's these adhesion contracts that we're being, you know, in some ways, if we want to use these services, we're almost forced to follow their rules. And those rules are saying that you're getting this type of consent. Now it's a lot of debates around whether or not that's actually informed consent. But at the end of the day, we have the public that is actually engaging with these services and agreeing to whatever the terms are. And it's because of that consent that we have people that are deciding again and again to hand over their privacy in a way. And so how do you see If there is going to be a shift away from this, we have companies like Apple that are at the tech stack level creating policy decisions that are driving from more of a competition perspective. We have the GDPR from the European Union that is really also trying to set a certain set of guidelines for privacy architecture and privacy engineering that is really bringing about a lot of shifts. And you alluded a little bit about the enforcement side is starting to come to bear. And it's still yet to be determined as to whether or not that's going to have the full teeth and the full potential of what GDPR is going to do. But when I look at these issues, I come back to the ways that we have these adhesion contracts and informed consent. And we have the public that is agreeing to these terms of services by the fact that they're using the services. And so how do you shift the fact that you have almost like this consent loophole that is allowing these companies to maybe do something that, you know, like Dr. Anita Allen is a philosopher of privacy who is arguing for more of these types of paternalistic approaches like GDPR that are saying maybe these people don't really understand what they're really giving away. And so we need to have regulators step in and say, here's some actual boundaries that we're forcing the companies to live by because the consumers are not able to be good stewards of their own
[00:28:02.985] Jason Kint: Yeah, good question. So, you know, the very clear and kind of, you know, in your face approach of GDPR, you know, in the pop-ups across the web, which really are a result of, it's kind of a misattribution because they're a result of prior directive before GDPR called e-privacy, but, but they've continued. Those have been valuable in terms of putting it in the discussion and setting the table. Clearly having to click on something, particularly in the world of dark patterns where the user is often not clear on what they're clicking on, is a disruptive experience. Ultimately, we want to land in a place where consent is only required when you're going to do something maybe that the user wouldn't expect you to be doing with their data. So getting closer to really consumer expectations. And so I think GDPR actually has that in the law with, they also have purpose limitations that haven't been enforced so that there's alignment with what the user actually has consented for and certain things can be done. under legitimate interest without actual consent. So you can say, this is overwhelmingly or in the balance, this is for the consumer. So that maybe you don't even have to bother the user if you're personalizing using first party data as part of that experience, and the user has actual choice not to use the service. And you're really only having to ask consent for things that maybe would be outside of the user's expectations, like having another party have access to that data. I see innovation happening with California to try to solve for that where, you know, in the California law and CPRA in particular, the update to it, which we're still waiting on the final regs for anytime this quarter, there'll be coming out, but it essentially says there are a whole range of permitted uses of data that you don't need to ask the user for consent. If you're the business they're choosing to interact with. And so, because we did talk about antitrust early on. I'm making the assumption that the user has actual choice to use that service, and they could go to a competitor if they weren't comfortable. But assuming that there's actual choice, if you're choosing to use that website, there are certain things that the consumer would expect you'd be doing with their data to deliver it, to measure it, to log you in, authenticate you. but they wouldn't necessarily expect you to share that data with a third party. What California has done is that instead of asking for consent every time you go to a website and pestering the user, we're just going to give the user the right to opt out and we're going to allow them to do it with a single click, with a global privacy control. Then in one click, they can say, hey, I no longer want any of my data to be traded with any third parties or shared with any third parties. and I don't want to be tracked basically, which is kind of what exactly what Apple built into iOS 14.5 is you have to ask the user for permission to be tracked. And that, you know, very quickly aligned with the consumer's expectations. And, you know, the interesting thing about that is we did research many years ago on users and whether or not they expected to be tracked by third parties or by Google or by Facebook. And in all cases, the answer was no, it was, 65, 70% of the users would say, when I'm using X website, I'm trying to pick on anybody, but when I'm using X website, when I'm using Google, I don't expect my data to be shared with a third party. as part of that experience. It's just the base level expectation. So the shorter answer would have been just getting closer to consumer expectations so that you don't have to constantly ask, but then you really have to give the user a nuclear option to say, I don't want my data shared with third parties, period, across the board, unless I'm choosing to interact with them.
[00:32:01.388] Kent Bye: Yeah. And as we start to see the dynamic between the GDPR and the European union, they've created a very paternalistic approach. And that has really shifted the privacy architectures of a lot of these big tech companies. However, a lot of the full protections of GDPR are not necessarily available around the world. And so in the United States, we're really stuck with this split system between the federal laws that are very context specific, but then you have state laws that you have, like Illinois has a biometrics law, you have California and you have Virginia and Washington are coming up with their own state laws. And there seems to be an overall large consent that we want to have a federal privacy law here in the United States. But I think the challenge is, is that you have people that want to preempt the state laws and then basically take away all the different protections that people in California are able to enjoy. But yet again, You have the companies that want to just implement it once and not have to follow all the regional laws of all the different states. And so, but at the same time, there didn't seem to be any sort of political will to have a compromise. The polarized nature of our political system here in the United States means that it is sort of at an impasse. And so I don't know if you foresee in the short term, if there's any hope for a federal privacy law that we may see that starts to have the same types of protections that we're seeing from GDPR and the EU.
[00:33:23.432] Jason Kint: I mean, I would watch California closely because I think that's what's going to drive that compromise even closer. I think privacy is truthfully one of the few bipartisan concerns that are happening still in Washington. probably took a bit of a step backward with, or depending on how you look at it, but it's less likely to move forward under the new Congress for a period of time. But as California rolls out and they start to enforce, I think that will put more pressure on a federal law because the the voices in the companies and I'd call them the surveillance capitalists and their associations who were radically opposed to any sort of federal privacy law period. The same folks that fought do not track and have built enterprises off of unbridled data and ad tech and sharing of data. those voices now are pushing for federal privacy law because, as you mentioned, they want to preempt the states, in particular, California, where there's a strong law, and Colorado, where there's a strong law, and Connecticut, where there's a strong law. They want to preempt those states. Then you've got the probably good actors, businesses that just want to have one law rather than potentially 50 plus laws. They don't want to have the patchwork and they want to be able to know what the rules are consistently. And, you know, they're in favor and they're probably a little more comfortable with a stronger law than those other folks. And then the consumer groups and the activists, you know, they see if they could have a law that's like California that works federally, then that would be the ultimate win. And that'd be a GDPR type law with, you know, US style enforcement, which is likely to be stronger. And so they're all pushing for a federal law, I guess, is the important point. Whereas, there used to be a large commercial group that were hell-bent against any sort of federal law, and that's gone. I think California is the reason. As you see enforcement start to play out in California and Colorado and Connecticut are aligned, things will start to move more quickly in DC.
[00:35:35.057] Kent Bye: And I'd love to hear your take on Susanna Zuboff's book of surveillance capitalism and the impact that you've seen that book that tries to, I guess, articulate the patterns of surveillance capitalism. She calls it the unprecedented nature of this evolution of capitalism in the sense that the role of supply and demand and how there's this behavioral surplus that is changing the dynamics of these new forms of capitalism that have really overtaken the overall economic ecosystem. This idea that data is kind of a gold mine and that you have all these companies that are trying to collect and aggregate all this big data that's driving a lot of the innovations of artificial intelligence and in the absence of that big data that we wouldn't have as many of those innovations. But From your perspective, when you're sitting and interacting with these different media companies, what is the role of the book Surveillance Capitalism in terms of defining these concepts and these ideas as a way to start to push back against them?
[00:36:33.944] Jason Kint: Yeah, I mean, as well written and thorough and insightful and provocative that the book was and is in all of its forms, you know, just the two words themselves, putting the term Surveillance Capitalism to the business model, and the way that the digital world has developed has been incredibly valuable. And one of the things that Google, Facebook, and all of its proxies have done well over the years is create the language and the terms in which we talk about these issues. And so even just in the advertising world, we used to call it behaviorally targeted ads, but then they shifted the world towards calling it interspaced ads. Now they're trying to call them personalized ads. You know, and the language we use as an industry to talk about these things and kind of probably bury the bad and, you know, and only talk about the good is pretty powerful. And so the term surveillance capitalism, which, you know, initially was seen as a hyperbolic kind of adversarial approach to the internet has really worked its way into all the discussion to the point of the FTC, you know, using a form of it as an advanced rulemaking. I think is what they, the term they use. So, so the language has worked its way in and I think people understand it and it's provocative and it's polarizing in some ways because those who depend on it don't like the term and they want it to go away. And those that understand this is the way the internet's actually been developed have something they can very clearly articulate it around in just a couple of words. So I think that's powerful. So I think it's been critically important, I guess, to the discussion. And I don't shy away from those terms at all, because it's making money off of not just the active data that you can see that the user is intending to use as part of the communication channels, but the passive data that can be collected by just watching what the user is doing when they don't even have any knowledge that you're interacting with them. And that's the surveillance piece to me.
[00:38:40.735] Kent Bye: Yeah, there was a Wall Street Journal article that was covering the Irish commissions of the EU starting to bring about some of the enforcement actions of the GDPR. And I feel like it's what I hear from other folks that work in the EU that It seems like we're still at the early phases of knowing the full extent of how much this can be enforced. And so I'd love to hear some of your reflections of whether or not you see some of the different actions of the GDPR are going to be, what I see at least, as some of the strongest resistance, aside from what Apple is doing and from the economic competitor side, but from the regulatory side, it seems like that's going to be a bit of a make-or-break moment for the future of this business model of surveillance capitalism. Even when these companies have the users using their websites as intended, there may be ways in which even how they've architected that is a violation of GDPR. Maybe you could elaborate on What is happening there, and I understand that there's an appeals process that's currently being appealed, but at least there's some early indications that some of the ways that these companies have been building their sites may not be viable in the long-term.
[00:42:49.368] Kent Bye: Yeah, you mentioned the Digital Markets Act. And for me, it brings Apple into the discussion for kind of the first time for our discussion, aside from what they've been doing with asking users to consent to whether or not they're being tracked. But, you know, Tim Sweeney of Epic had a whole lawsuit against Apple because he wanted to have his own app store on the context of Apple. If we look at the context of computing, we have PCs that are essentially an open ecosystem. And then when we start to move into mobile, we have both iOS by Apple and Android by Google that are essentially a privately owned operating system that you have to follow their rules to be able to be on these platforms. And then as we move into future technologies, whether it's virtual or augmented reality, Meta and all these other companies are sort of adopting what's already happened in mobile. So we're taking those lessons that you can basically run your own ecosystem on the technology platform And I feel like that the Digital Markets Act is trying to, in some ways, push against that. The fact that even though you have these technology hardware platforms, that you still have to have somewhat of an open economy that would be, in some ways, these concepts of antitrust that were conceived of at the turn of the century. as we think about the digital translation of these, they've not always translated into a way that they could be enforced in the same ways that we have like physical objects. And so with the Sherman Act and everything else with antitrust, maybe the Digital Markets Act is the next evolution of trying to enforce these types of antitrust legislation. Love to hear some of your thoughts on that, especially as you have this dual pillar of privacy and antitrust and how you see the Digital Markets Act as the next evolution of pushing against some of these anti-competitive behaviors
[00:44:29.959] Jason Kint: Sure. Yeah. And you know, on Apple, on the privacy and data side, I'm normally comfortable because, you know, they're focused on the consumer expectations as a premium product suite. And so it mostly aligns with where, you know, we think the law and the rules should go. but I also recognize that that's an extraordinary amount of power for an individual company. The more evidence and concern that might not be aligned with the consumer long-term is the revenue rate that they take of 30 percent of the transactions in the App Store and you have to use their App Store to the point you described in terms of control of the entire operating system and stack. And it just defies logic that they should be able to take 30% or even 15% of recurring transactions, regardless of the price point. And so when you're rolling out your app store back in the first days of iOS, and they're rolling out the app store, and they sat down and model out, should we take a flat fee per transaction, or should we take a percentage? Of course, we should take a percentage. But if we can get 30% of $1,000 subscription, and take $300 from them and then take 30% of a $5 subscription and get a buck 50 from them. We're going to end up with more money that way. But for the most part, there's no additional cost to Apple as a company that matches that 30% of the thousand dollar service. And so, which is the extraordinary amount of revenue to take off the table. When you think about things like the high cost of news and investigative journalism and humans that are, working in newsrooms and the 30% revenue share or 15% on recurring subscriptions, you know, that in itself could fund many newsrooms at local news properties and even national news properties. And so it's problematic. And, you know, we've been very vocal about that and, you know, laws like the digital markets act that force gatekeepers to, to play by certain rules and, or open up other channels for competitive app stores, for instance, I think are critically important. Ultimately, it comes back to having a competitive marketplace, and ultimately, that will bring value back to the consumer at the end of the day.
[00:46:51.295] Kent Bye: So going back to the discussion I had with Vint Cerf, because one of the things that he was bringing up in the conversation I had with him was that he has a perspective of seeing the different business models from the origins of the internet and how there was a certain phase in the 90s where your time that you spend on the internet clocked. So you would be on the clock as to whether or not you were using the internet, you were being charged through basically how much you're using it, you have to pay. And so they sort of found over time that when you take away that pressure of having to pay for each of your use, that people would use it more and you'd actually have the network effects. As more people use the network, it becomes more valuable. And so I think over time, we've seen different business models over the course of the internet and we've had surveillance capitalism through this time. But what are the next evolution of those business models that may be replacing it? And are we at that point, through those business models, kind of going back to taking away access for people who may not be able to afford interacting with these different services? Because I go back to this dilemma, the fact that they're arguing ethically that you have to give access and equity and inclusion for all these people who may not be able to afford things. And so as we move into these new models, we've seen a lot of just from the news organizations, if you go to the website, you get a paywall. And then all of a sudden we have different aspects of the polarization in America, perhaps in part, because there's not equal access to the information that people who can pay for it, maybe understanding what's going on, but we have a bifurcation of what the truth even is in part, because we have a lot of the paywall of access to news and information So I'd love to hear some of your thoughts of the future of these business models that try to really balance not only the equity and access question, but also to have it so that we're getting past the more dark patterns of surveillance capitalism.
[00:48:45.431] Jason Kint: Sure, yeah, good question. I find myself wanting to separate that question point into two different lanes. And I haven't spoken to Mr. Scherff about this in a while. But the access to the internet piece is one lane. And yes, early on, with various access providers, AOL, et cetera, AOL probably being the most famous, you paid based on time. of usage, how long you were connected to the internet through your dial-up service provider. And that was a world that we needed to move away from. And the internet was the solution to that. And everybody, hopefully, on this planet should have access to the internet over time. And if they can't pay for it at their own residence, they have access through other channels, libraries, et cetera. But access to the internet hasn't gotten cheaper as far as You know, we're all still paying, I think, a decent amount per month to get onto the internet to our cable companies or however you're you're paying for your service in most places. But that's access to the Internet. That over time hopefully becomes cheaper and everyone has access through various subsidies. Then you have various services that sit on the Internet and being able to make sure that news apps and news sites are accessible to inform the public as broadly as possible. Those are business models that have been developed and will continue to evolve. protecting the user's data so that the data is only being shared with the companies that they value, I think can coexist with a world where there still is access to that content broadly as there is today. If we don't protect the intellectual property of those creative outlets and news providers, etc, and that includes the data and the relationship and the trust with their user, then it's eroding anyway. We're having erosion of trust in news provision anyway, under the current rules. And so this notion of kind of mixing the two and claiming this is just the business model of the entire internet, surveillance capitalism, I think is grossly misleading. And I think the world in which the data can be controlled by the individual user and the properties they choose to consume can coexist with a world where we can still inform the public and we don't have this digital divide. But I do think we do need to be able to get them onto the internet, for sure, regardless. And hopefully that's a fair answer to the question.
[00:51:21.022] Kent Bye: Yeah. And I guess to kind of bring it back to the domain that I'm looking at with virtual and augmented reality, we have the evolution of surveillance capitalism in a sense where we have all this data that's coming off of our bodies. And that data currently is not being defined by even the biometrics laws in Illinois are very connected to identity. But yet the contextual information that you get on someone's likes, dislikes, and their preferences in the moment could be revealed by eye tracking, galvanic skin response, and different sensors that are going to be integrated into these immersive technologies. And so I'm not sure if you're familiar with concepts like neurorights, where you have the right to mental privacy, the right to identity and the right to agency that as you have these companies that are able to more sophisticatedly model our mental thoughts and our cognitive processes through the violations of mental privacy, to map out our identity through these inferences that are being made across our behaviors that we're doing. And this is happening on the 2D web as well, these inferences. And then eventually the right to agency is that we're having these nudging behaviors that are able to shift our actions based upon information that we're provided, which has different political impacts that we've perhaps seen with Cambridge Analytica. But we have different ways that are addressing the identity part, but this sort of whole aspect of the inferences that are made on us and the ways that these companies are modeling our identities I don't know if you have any way that you see hope for existing methods to start to counteract. I know there's the AI act within the context of European Union, but even that doesn't necessarily go as far as to controlling these different inferences and the identity that's being mapped. So yeah, any frontiers that you're seeing from a legal front or other movements, when we think about the larger aspect of these inferences, but also as we move into the more sophisticated levels of biometric data and these neural rights that are going to be implied from not only the XR technologies, but also the future of neuroscience, brain computer interfaces and things like that, that are going to get more and more intimate data from us.
[00:53:22.113] Jason Kint: Yeah, no, I, some of the discussions are happening. I often worry that they're used as a way to resist current regulatory approaches because I saw that with mobile where some of the discussion around the desktop web and privacy on the desktop web was kind of ground to a halt because everyone said, well, the world's shifting to a mobile world, so we should focus on the mobile world. You know, and now as we're starting to see some movements, then it becomes a, what about this? You know, we can't keep up. What are we going to do about inference data and AI and neuro data, et cetera. And I think GDPR does this to an extent, but the rules need to be written in a way that applies for all access and use of data. And inference data is a part of that for sure. and giving real agency to the individual. Because the violations and the economics behind it that can be imagined in the neural world, even just eye tracking itself, are so evident and obvious in the invasion of the individual persona and and their rights and then using that to make decisions on, you know, it was just so much about an individual's identity that can be assumed, wrongly assumed, unfairly taken by just being able to track their eyes as they go about their day. And so it's profoundly important. And I'm just thrilled that there's smart minds like you that are out there probing deeply these questions with so many people. So thank you for doing that.
[00:54:57.896] Kent Bye: Yeah, and the final question that I wanted to ask you is, when I see your actions on Twitter, you're tracking this deeply. You seem really motivated to see the different moral harms that are happening with these companies, the way that they're acting with the data. There's all these lawsuits that you've been tracking with Facebook slash Meta. And I think as I hear you speak, you come back to this idea of trust and building trust between the consumers and these companies and that how these actions of some of these companies, whether at Google or Meta slash Facebook, that are eroding different aspects of consumer trust, whether it be Cambridge Analytica or, you know, inflating numbers or not really being transparent and being sneaky in the way that they're getting what would be arguable not full user consent to all their actions. And so I'd love to hear some of your final thoughts of, you know, what is motivating you to really dig in and what you see as the most exalted potential future that we could live into that is having things be in a little bit more right relationship with these companies and consumers.
[00:56:00.307] Jason Kint: That's a big question to end with. Um, Yeah. I mean, I do lean heavily into, and I actually was diving into academic research on trust before I took on this, this role in building out DCN because that fundamental building block of two parties, whether it be a publisher and a consumer or a tech platform, a consumer or an advertiser and a tech platform, but you've got this three legged stool for media, at least that has worked for so long. That's built off of that relationship between the consumer, the media property and the advertiser that often subsidizes it. It's the trust between those parties that sustains the value. It's really about the two parties knowing what they're going to get in the relationship and being dependent on each other. and delivering on it on an ongoing basis. And, you know, ultimately in the media world, you can have all sorts of debates, including political ones about which brands you can trust, which ones not to trust, which ones you feel are more accurate or inaccurate, whatever. But, but ultimately it's down to the individual person and, and are they getting what they expect in value from that property?
[00:57:10.414] Kent Bye: And that applies to entertainment too.
[00:57:11.795] Jason Kint: I mean, HBO as a defining brand for entertainment, right? There's a level of quality that we always expected from shows on HBO. We're willing to pay a higher price for it. Right. And so, or Disney as another entertainment company. And so, you know, whether or not that brand aligns with your own personal interests and trust is up to the individual. And so, but that trust is what sustains the value. And, If you don't have control over that or your roads, or you don't have a choice to go somewhere else when it abuses your trust, then that's problematic. And so I just see it as a fundamental building block. going forward and that the rules and principles need to be in place in order to make sure that it continues to be a foundational layer. The hardest part of this discussion is always being able to be sophisticated enough and understanding enough about the technology and all the improvements and opportunities that are coming with the technology. So not be scared of it, but to also understand that the technology does need to have principles and rules and guardrails going forward. That can't just be about the economic interests of the most dominant companies.
[00:58:21.933] Kent Bye: Awesome. Is there anything else that's left and said that you'd like to say to the broader immersive or emerging technology community where people can find you and get more information about your work?
[00:58:31.693] Jason Kint: I try to make myself as accessible as I can be. So don't ever hesitate to reach out by email or my Twitter handle, Jason underscore Kent, and just keep disrupting, keep thinking, keep pushing forward. I think that's all positive. I'm a lover of technology. And so I am Hive, and I know we can do better. So thank you for your time.
[00:58:53.723] Kent Bye: Awesome. Yeah. Thank you for all the work that you've been doing to keep close tabs and all these different pending lawsuits there at Metta. You've been digging into a lot of sources that I don't see from any other folks cover and, uh, really appreciated, you know, your diligence and being able to be a watchdog of what's happening with some of these different discussions to add additional context and also to have these larger discussions around the future of these relationships and to build trust and to fight against these different dark patterns of surveillance capitalism, whether it be in meta or Google or antitrust when it comes to Apple. So thanks again for all your work. And thanks again for joining me here on the podcast to help break it all down.
[00:59:29.959] Jason Kint: Thank you, Kent. Have a good rest of your day. Bye bye.
[00:59:32.219] Kent Bye: So that was Jason Kent. He's the CEO of Digital Content Next, which is a nonprofit trade organization that's looking at the future of news and entertainment companies and advancing the future of trusted content. So, I have a number of takeaways about this interview is that, first of all, well, it's good to get the perspective of someone who's really deeply immersed in the context of the advertising world, representing these different companies and trying to articulate some of these different types of anti-competitive practices, especially when it comes to Google and the ads market, but also some of the different behaviors of Facebook slash meta over time has also skewed the overall ecosystem for how these companies are able to really sustain themselves. One of the things that Jason was saying is that, you know, from the different disclosures, as he's reading through all these different antitrust lawsuits, and he's tracking this like super closely, I highly recommend you follow him at Jason underscore Kent with K-I-N-T, where you can see some of the different ways that he's digging into all the latest depositions and lawsuits and just trying to tell a larger story of what's happening with these companies over time. And one of the things he said is by looking at all these different disclosures over time, he's seen that just how important the third party data on the back end has been for Facebook slash meta to be able to target these different ads and really showed with Apple's with their do not track to prevent them from being able to track behavior across these different platforms and that when they own the whole headset, then they're not going to have that problem of tracking behaviors across all these variety of different apps. I think that's essentially what they're referring to as the conversions. And with Apple's do not track and their Apple ID for advertisers, there's ways that some of that has been cut off. And it's essentially really hurt their bottom line. Also, just the fact that, you know, as we move forward into these immersive technologies that at the core essence of Facebook slash meta, they are an ads business. And so they're obviously gonna be looking at how to use advertising to support this leap into these new immersive technologies. which harkens back to different scenes within Ready Player One where you have the prototypical IOI company who is dreaming of filling up the user's field with every possible square inch with advertising as they move forward. Yeah, there doesn't seem to be any clear answer for how to avoid this business model of surveillance capitalism. I mean, Jason was saying that's very helpful to be able to identify what these companies are doing, because they've been determining the terms of what language is being used to describe what they're doing. Sushana Zuboff, Surveillance Capitalism, gave them a moniker to identify what's happening with this unprecedented nature of the new business models of surveillance capitalism, and that slowly percolated out throughout the entire industry, as well as up into the FTC, starting to integrate it into different languages that they have, as they're one of the entities that is in charge of enforcing aspects of consumer privacy. I guess the other thing that we cover here is just kind of a landscape what's happening in the United States in terms of legislation. There is this split between the state legislation versus the federal legislation. There doesn't seem to be any short-term, at least, indications that we're going to have any breakthrough comprehensive federal privacy law, which kind of leaves it up to the states to continue to innovate and create a fragmented ecosystem that maybe creates additional pressure for a push for a comprehensive federal privacy law. But at the other side is maybe a weakened consumer protections. So, yeah, just to hear how these combinations of antitrust and privacy together, specifically how it's impacted the overall ecosystem of these markets, and that what Shushana Zuboff is saying is that there's been this unprecedented nature of surveillance capitalism, you know, as Jason was saying in this interview, that it's taken a long time for these regulators to identify the importance of things like data and to see whether or not there might be some market domination Aspects that are resulting from the consolidation of all this data and advertising and that's certainly happened with both Google and Facebook over time there's been more and more money being generated but the people that were really profiting were Facebook and Google and identifying that it was really down to the amount of data that were being collected and So as we move forward, we're still kind of at the basis of this model of surveillance capitalism. We'll see if there's any new radical models if we go back to a subscription model, which seems to be what a lot of these different newspaper companies have been going to. So there's larger issues with access to the Internet as well as, you know, how to get access to all this information. how to create a way to balance these different tensions of access to the technology as well as ensuring that we're not encroaching on people's privacy or that consumers are not mortgaging their privacy. So yeah, certainly there's a lot of stuff that's happening with GDPR that we'd covered in the previous two interviews. And yeah, I put a lot of hope in terms of other legislative breakthroughs that are coming from the European Union rather than what's happening in the United States. But at the same time, this landscape is going to be dictated by where these companies are located, which is in the United States. And it seems like the thing to keep an eye out on is what's happening at the state level, and maybe we'll have some federal privacy law at some point. But I'm not necessarily holding my breath. It's going to start to address some of these deeper issues of this next wave of technology, which is neuro rights and the right to mental privacy, the right to identity, and the right to intentional action. And so, yeah, there's still, for me at least, a lot of open questions for where this goes in the future. And I guess refer to my previous two interviews that are talking more about the European Union perspective on that, because that to me is the most hopeful were the latest innovations that are coming on the regulatory front. So that's all I have for today. And I just wanted to thank you for listening to the voices of VR podcast. And if you enjoy the podcast, and please do spread the word, tell your friends and consider becoming a member of the Patreon. This is a supported podcast, and so I do rely upon donations from people like yourself in order to continue to bring you this coverage. So you could become a member and donate today at patreon.com slash voices of VR. Thanks for listening.