Category: TECHNOLOGY
Silicon Valley’s Talent Spotters Are Now Looking for Jobs
Few professionals have felt the whiplash more than recruiters as big tech’s long-running hiring boom fades out.
YouTube Music starts rolling out its personalized end-of-year Recaps
YouTube Music announced today that it’s starting to roll out its personalized end-of-year Recaps to allow users to relive their favorite music moments of 2022. The launch comes ahead of Spotify’s highly-anticipated Wrapped feature, which tends to takes social media by storm every year.
YouTube Music introduced the Recap feature last year to compete with Spotify. The feature lets users see their top artists, songs, music videos, playlists and more. This year, the company says it’s making the experience more immersive.
The 2022 Recaps includes a new “Top Trends” stat that will show you which artists you discovered before others. There’s also a new “Identity” feature that will give you a personalized “music personality” that captures your music vibe based on your listening habits. In addition, the Recaps share the unique-to-YouTube content, such as remixes and live performances, that you loved the most this year.
You can also see shareable cards highlighting your top songs from each season. You can even choose to personalize them by adding your own images directly from Google Photos.
Last year, you could only access your Recap through YouTube Music. This year, the experience is accessible through the main YouTube app. You can access your Recap by heading to the YouTube app on iOS or Android and searching for “2022 Recap.” You will then see your Recap playlist and you can click on the stories banner to view your personalized stories.
Once you see your stats, you can share your 2022 Recap on apps such as Instagram, Twitter or Facebook by tapping the arrow at the bottom of each story. A big part of the success behind Spotify Wrapped is the ability to share your stats on social media, so it’s no surprise that Youtube has also made it possible to share your results with others.
YouTube is getting ahead of the game against Spotify, which hasn’t rolled out its Wrapped experience yet. The streaming service sent an email to users last week saying that Wrapped would be coming soon. The launch of YouTube’s Recap experience comes the same day as Apple Music rolled out its revamped Replay feature.
YouTube Music starts rolling out its personalized end-of-year Recaps by Aisha Malik originally published on TechCrunch
Apple Music launches revamped 2022 Replay experience with new highlight reel
Apple Music has launched a revamped 2022 Replay experience to let subscribers explore their top songs, artists, albums, genres and more. Although Replay is still only accessible via the web, the redesign brings the annual recap feature closer to the interactive nature of Spotify’s Wrapped experience.
Replay now includes a Stories-like highlight reel that displays your listening activity for the year. Each page includes animated transitions with music playing in the background. You can also see if you are the in the top 100 listeners of a specific artist or genre, which is similar to Spotify’s Wrapped functionality that notifies users if they’re in the top percentage of listeners for a specific artist.
One feature that sets Replay apart from Wrapped is that users can continue checking Replay until December 31 to see if their listening patterns evolve before the start of 2023. Unlike Wrapped, the Replay feature will continue evolving until the end of the year.
Once you see your stats, you can share your 2022 Replay on social media or messaging platforms. A big part of the success behind Spotify Wrapped is the ability to share your stats on social media, so it’s no surprise that Apple has also made it possible to share your results with others.
You can see your Apple Music Replay by visiting replay.music.apple.com and logging in with the same Apple ID you use for Apple Music. From there, you can play highlights or scroll through the page for more detailed insights.
Apple Music’s Replay rollout comes ahead of Spotify’s Wrapped launch. The streaming service sent an email to users last week saying that Wrapped would be coming soon. The launch of Replay comes the same day that YouTube rolled out its Recap feature.
Apple Music launches revamped 2022 Replay experience with new highlight reel by Aisha Malik originally published on TechCrunch
https://techcrunch.com/2022/11/29/apple-music-2022-replay-experience-with-new-highlight-reel/
Early-stage founders still have currency: Fundraising in times of greater VC scrutiny
There’s no question about it: The market going into 2023 isn’t going to be what it was when 2021 ended, when growth at all costs sometimes trumped common sense.
But the market isn’t as “down” as it may seem. There’s plenty of money to be invested, and founders who have the right mix of purpose, business model and traction need to remember that opportunities for funding can still be found.
Sky-high valuations and questionable investments in 2021 have brought investors back to Earth and prompted more thorough analysis of investment opportunities. This return to discipline, demonstrated by a more tempered and stabilized volume of investor weekly pitch deck interactions, isn’t a big surprise. The pace in 2021 was unsustainable and there was bound to be a slowdown in the funds invested. However, it’s not because there is no money left.
As of September, there was around $290 billion in “dry powder” floating around — enough to fuel startup investments for the next four years — but founders are finding it harder to raise money than they have in many years. Instead of demanding growth at all costs, VCs are taking a deep breath and erring on the side of patience.
Unlike in 2021, unsuccessful early-stage decks today aren’t getting as much investor time as successful decks.
Founders may be discouraged in this environment, but they need to remember that they have “currency,” too. Founders should do their own due diligence by identifying investors who best suit their needs and focus on their core strengths and value propositions.
Due diligence isn’t only for investors
Founders should always be eager to set up meetings with investors, but they should aim to reach out to a variety of investors, too.
Much as a product is dependent on its market, a founder is dependent on their investors. Not all investor meetings are equal, so founders need to research their potential investors thoroughly.
DocSend’s recent pre-seed report found that the average number of investors contacted dropped from 69 to 60 in 2022, but the average number of meetings scheduled increased from 39 to 52. This could be a sign that early-stage founders are starting to practice due diligence on their end as well, vetting investors and bringing different expectations to every meeting.
Early-stage founders still have currency: Fundraising in times of greater VC scrutiny by Ram Iyer originally published on TechCrunch
Founder factories: Alumni from 344 European and Israeli unicorns have birthed 1,018 startups since 2008
While many of the names on there such as Spotify or Skype are long-established founder factories, what’s perhaps more notable are that of the more recent entrants to the unicorn brigade,
A new report has shone a light on the impact that European and Israeli unicorns have had on the broader technology ecosystem since the global economic crisis 14 years ago.
The report, titled Europe and Israel’s Startup Founder Factories, was produced by VC firm Accel with heavy support from startup and VC data platform Dealroom. It reveals that of the 344 VC-backed unicorns since 2008, nearly two-thirds (203) have led to at least one startup being founded by former employees, with 1,018 tech startups emerging in total.
Founded back in 2005, French adtech giant Criteo leads the pack with its alumni going on to create 29 so-called “second generation” startups. This is followed by Spotify (27), Delivery Hero (27), N26 (24), Klarna (23), Revolut (23), Skype (21), BlaBlaCar (21), Zalando (20), and Wise (19).
Number of “second generation startups” spawned from European and Israeli unicorns Image Credits: Dealroom / Accel
While many of the names on there such as Spotify or Skype are long-established founder factories, what’s perhaps more notable are that of the more recent entrants to the unicorn brigade, such as Glovo and Wefox, are already leading to a whole bunch of new startups.
Indeed, a plurality of the unicorns covered in the report only hit unicorn status since 2019.
Unicorn founder factories: Cohort distribution Image Credits: Dealroom / Accel
Experience
This latest report comes as companies from across the industrial spectrum have faced a frosty reckoning with reality this year due to the global economic downturn: valuations at pretty much all stages are down.
However, with the sheer number of tech workers that have been laid of this year, from big tech giants such as Meta and Twitter, to growth-stage startups in just about every vertical, this could create a fertile landscape for a swathe of new startups to emerge. And that, perhaps, is why Accel is producing this report now — it wants to show that some good can come from tough times.
Indeed, the timescale of this report is particularly notable, as its data starts at the time of the last major financial crisis — a point in time that also signalled a major transformation in the technology industry, with smartphones just emerging into the mainstream arena. In the intervening years, countless technology companies have sprung up, some catapulting toward world domination, some disappearing into oblivion, and some falling somewhere in the middle. But irrespective of how events transpired, it all served to produce a lot of people with experience of building and scaling complex tech-infused startups. Even failure isn’t necessarily a bad thing.
“While founders and their teams are navigating a tough macroeconomic environment, it’s also true that the community is in a much stronger position than during the 2008/9 financial crisis,” Accel partner Harry Nelis said in a statement. “There’s now a wealth of strong founders and operators building innovative companies that have experienced the start-up journey before and have the knowledge to create global success stories.”
It seems that this trend isn’t lost on unicorns themselves. Just last week, Spanish delivery company Glovo, which was acquired by Delivery Hero back in January and which has laid off a number of employees this year, announced a new program called Glovo House, designed specifically to support Glovo alumni founders via mentorship, networking, and support for raising money.
Methodology
For the purpose of Accel and Dealroom’s report, the term “unicorn” describes any VC-backed company that achieved a valuation of $1 billion or more while it was a private company, though it excludes pharmaceutical or biotech companies. And “startup” refers to any technology company that was founded by someone formerly employed by a unicorn on a full-time basis for at least five months, and who started their new company within six years of leaving the unicorn.
Digging into the data does reveal some potential flaws, insofar as less than half (44%) of the second-generation startups have confirmed raising more than $1 million in funding. While venture capital funding isn’t the only bellwether of what constitutes a successful startup launch, it’s certainly a strong indicator — thus, it’s difficult to know how many of the startups gained any meaningful traction.
Indeed, when pushed on the data, Accel said that just 48% of the startups had revealed raising $100,000 or more. However, it caveated this by noting that 54% of the startups had only been founded since 2020, meaning that many of them are still very early-stage and either haven’t raised any outside funding yet, or have yet to announce it.
Second-generation unicorns
Digging even deeper into the numbers reveals some other notable nuggets. Delivery Hero, for example, has birthed Flink, Gorillas, and Jokr, while Skype led to Wise, Bolt, and Pipedrive — each of these companies have gone on to hit unicorn status themselves.
Also, there is at least one third-generation unicorn out there. Israel-founded payments company Payoneer has spawned some 12 startups, one of which is IronSource which recently merged with Unity in a $4.4 billion deal. And it was IronSource employees who launched Noname Security, which hit a $1 billion valuation last December just a year after it was founded out of Israel.
In total, there are 23 examples of unicorns birthing unicorns, though not all of those secondary unicorns are necessarily based in Europe themselves. The report did state, though, that 56% of second-generation companies were founded in the same city as the original unicorn.
On top of all that, with layoffs and scalebacks rife, it’s not clear whether all these companies’ respective valuations are still at a “unicorn” level today — some of these valuation needles may spin backwards in a future funding round.
On location
The report also delved into founder factories by city, with the data suggesting that London remains a bedrock in the European technology sphere — the U.K. capital is top of the list in terms of overall number of startups spawned by unicorns. Indeed, 27 unicorns founded out of London created 168 startups over the past 14 years, 69% of which are also based in the city. Berlin was second with 24 local unicorns creating 138 startups, 70% of which were founded in the German capital. Rounding out the top five were Paris (125 startups from 22 unicorns) Tel Aviv (108 startups from 27 unicorns), and Stockholm (98 startups from 11 unicorns).
Founder factories by city Image Credits: Dealroom / Accel
However, it can be difficult pinning a startup to a specific region, as companies may move their headquarters to the U.S. early on to secure funding or be closer to customers. GitLab, whose former VP of Product launched Remote which recently hit a $3 billion valuation, is perhaps a good example of this — while its foundations are certainly rooted in Europe, the company is formally incorporated in the U.S. with a fully distributed workforce spread across dozens of markets globally. Similarly, Payoneer has been headquartered in New York almost since its inception.
The report did note that the location of the companies in the dataset was based on where they were initially created, irrespective of where they may have later relocated to. Put simply, in a world of remote work and founders with itchy feet, it’s perhaps not as easy to pigeonhole a startup as “European” or “Israeli” in 2022 as it was 14 years ago.
But despite all those grey areas, Dealroom’s data still gives some interesting insights into founder factories and the flow of technology talent over the past 14 years.
Founder factories: Alumni from 344 European and Israeli unicorns have birthed 1,018 startups since 2008 by Paul Sawers originally published on TechCrunch
Locus raises another $117M for its warehouse robots
The last few years have been a major accelerator for the robotics industry at large, but warehouse robotics may be the biggest winner of all. Stay at home orders fueled adoption in the early days of the pandemic, as some retailers stayed open after being labeled “essential businesses.” Even after things began reopening, those roles have remained difficult to fill, leading many firms to look toward robotic help.
All the while, Amazon has had a jump on most of the industry, dating back to the company’s acquisition of Kiva Systems a decade ago. The competition continues looking for angles to compete with the 800-pound e-commerce gorilla, and robotics startups have flooded the field, promising an edge.
Massachussets-based Locus Robotics has risen in the ranks, becoming one of the most prominent names in what is now a fairly crowded category. “We look at Amazon probably as the best marketing arm in the robotics business today,” Locus Robotics CEO Rick Faulk said at our robotics event in July. “They have set SLAs that everyone has to match. And we look at them as being a great part of our marketing team.”
Locus this week announced a $117 million Series F, led by Goldman Sachs, G2 Venture Partners and Stack, with existing investor Scale Venture Partners also participating. The company has been on a fundraising tear, with a $50 million raise last September that followed a $150 million Series E in February. Locus’s total funding is now north of $400 million. This latest round values Locus at “close to” $2 billion.
The firm’s promise is a brownfield solution, with systems that can be easily integrated into existing warehouses without much fuss. The company marked its one-billionth pick in September of this year and says it’s currently averaging around three million picks a day throughout its global operations.
“Locus is clearly the winner in the flexible warehouse robotics space, and the consistency with which the Locus team executes has been extraordinary,” G2’s Zach Barasz says in a release. “We are thrilled to be investors in Locus Robotics and to partner with the leading warehouse execution company in making global supply chains faster, more cost-effective, and more resilient and sustainable.”
He, along with Goldman Sach’s Mark Midle, will be joining the Locus board.
Asked about the challenges of raising in the current climate, CEO Rick Faulk tells TechCrunch:
In today’s environment, investors are focused on high-quality companies that have both strong growth/market leadership and business unit economics. Therefore, it is important to have a track record and forecast that supports both. Late-stage private companies are competing with beaten down public companies for investment dollars.
Companies are focused on improving operational efficiency and Locus assists with exactly that….therefore, there is strong excitement around being a differentiated solution in a very large end market. The raise will enable Locus to continue to extend its leadership in the market.
Locus raises another $117M for its warehouse robots by Brian Heater originally published on TechCrunch
https://techcrunch.com/2022/11/29/locus-raises-another-107m-for-its-warehouse-robots/
Apple Has No Easy Road Out of China
Unrest in China has affected production of Apple’s devices, threatening the near-term sales mix that investors were counting on to help prop up iPhone revenue and highlighting long-term risks.
https://www.wsj.com/articles/apple-has-no-easy-road-out-of-china-11669661578?mod=rss_Technology
Deepgram lands new cash to grow its enterprise voice-recognition business
Deepgram, a company developing voice-recognition tech for the enterprise, today raised $47 million in new funding led by Madrona Venture Group with participation from Citi Ventures and Alkeon. An extension of Deepgram’s Series B that kicked off in February 2021, led by Tiger Global, it brings the startup’s total raised to $86 million, which CEO Scott Stephenson says is being put toward R&D in areas like emotion detection, intent recognition, summarization, topic detection, translation and redaction.
“We’re pleased that Deepgram achieved its highest-ever pre- and post-money valuation, even despite the challenging market conditions,” Stephenson told TechCrunch in an email interview. (Unfortunately, he wouldn’t reveal what exactly the valuation was.) “We believe that Deepgram is in a strong position to thrive in this tougher macroeconomic environment. Deepgram’s speech AI is the core enabling technology behind many of our customers’ applications, and the demand for speech understanding grows as companies seek greater efficiency.”
Launched in 2015, Deepgram focuses on building custom voice-recognition solutions for customers such as Spotify, Auth0 and even NASA. The company’s data scientists source, create, label and evaluate speech data to produce speech-recognition models that can understand brands and jargon, capture an array of languages and accents, and adapt to challenging audio environments. For example, for NASA, Deepgram built a model to transcribe communications between Mission Control and the International Space Station.
“Audio data is one of the world’s largest untapped data sources. [But] it’s difficult to use in its audio format because audio is an unstructured data type, and, therefore, can’t be mined for insights without further processing,” Stephenson said. “Deepgram takes unstructured audio data and structures it as text and metadata at high speeds and low costs designed for enterprise scale … [W]ith Deepgram, [companies] can send all their customer audio — hundreds of thousands or millions of hours — to be transcribed and analyzed.”
Where does the audio data to train Deepgram’s models come from? Stephenson was a bit coy there, although he didn’t deny that Deepgram uses customer data to improve its systems. He was quick to point out that the company complies with GDPR and lets users request that their data be deleted at any time.
“Deepgram’s models are primarily trained on data collected or generated by our data curation experts, alongside some anonymized data submitted by our users,” Stephenson said. “Training models on real-world data is a cornerstone of our product’s quality; it’s what allows machine learning systems like ours to produce human-like results. That said, we allow our users to opt out of having their anonymized data used for training if they so choose.”
Through Deepgram’s API, companies can build the platform into their tech stacks to enable voice-based automations and customer experiences. For organizations in heavily regulated sectors, like healthcare and government, Deepgram offers an on-premises deployment option that allows customers to manage and process data locally. (Worth noting, In-Q-Tel, the CIA’s strategic investment arm, has backed Deepgram in the past.)
Deepgram — a Y Combinator graduate founded by Stephenson and Noah Shutty, a University of Michigan physics graduate — competes with a number of vendors in a speech-recognition market that could be worth $48.8 billion by 2030, according to one (optimistic?) source. Tech giants like Nuance, Cisco, Google, Microsoft and Amazon offer real-time voice transcription and captioning services, as do startups like Otter, Speechmatics, Voicera and Verbit.
The tech has hurdles to overcome. According to a 2022 report by Speechmatics, 29% of execs have observed AI bias in voice technologies — specifically imbalances in the types of voices that are understood by speech recognition. But the demand is evidently strong enough to prop up the range of vendors out there; Stephenson claims that Deepgram’s gross margins are “in line with top-performing software businesses.”
That’s in contrast to the consumer voice-recognition market, which has taken a turn for the worse as of late. Amazon’s Alexa division is reportedly on pace to lose $10 billion this year. And Google is rumored to be eyeing cuts to Google Assistant development in favor of more profitable projects.
In recent months, Stephenson says that Deepgram’s focus has been on on-the-fly language translation, sentiment analysis and split transcripts of multiway conversations. The company’s also scaling, now reaching over 300 customers and more than 15,000 users.
On the hunt for new business, Deepgram recently launched the Deepgram Startup Program, which offers $10 million in free speech-recognition credits on Deepgram’s platform to startups in education and corporate. Firms participating don’t need to pay any sort of fee and can use the funds in conjunction with existing grant, seed, incubator and accelerator benefits.
“Deepgram’s business continues to grow rapidly. As a foundational AI infrastructure company, we haven’t seen a reduction in demand for Deepgram,” Stephenson said. “In fact, we’ve watched businesses look for ways to cut costs and delegate repetitive, menial tasks to AIs — giving humans more time to pursue interesting, consequential work. Examples of this include reducing large cloud compute costs by switching big cloud transcription to Deepgram’s transcription product, or in new use cases like drive-thru ordering and triaging the first round of customer service responses.”
Deepgram currently has 146 employees distributed across offices in Ann Arbor and San Francisco. When asked about hiring plans for the rest of the year, Stephenson declined to answer — no doubt cognizant of the unpredictability of the current global economy and the optics of committing to a firm number.
Deepgram lands new cash to grow its enterprise voice-recognition business by Kyle Wiggers originally published on TechCrunch
Lyst, the UK fashion marketplace, is laying off 25% of staff
Lyst, the UK fashion e-commerce site that last year raised funding at a $700 million valuation, is the latest tech startup to rein in spending by cutting staff. TechCrunch has learned that the company is in the process of laying off 25% of its employees, working out to about 50 people, as part of a larger restructuring to conserve cash flow and move to profitability.
The details were first leaked to us by way of an internal memo from the CEO, Emma McFerran, who took over the role of CEO from founder Chris Morton in July of this year. The company then confirmed the details to us. It’s not clear which departments will be most impacted, but the memo notes that some 85 people are being contacted who will be ‘impacted by this exercise.’
We understand from sources that the company had plans for an IPO next year but that these are now being pushed back, and that it might be looking for another round of funding to shore up its finances.
Lyst last raised money in May 2021, when the picture for e-commerce was rosily tinted, one of the ironic bright business spots in the largely otherwise devastating Covid-19 pandemic: fashion retailers in particular were seeing record-breaking revenues and business growth online as consumers turned away from shopping in person and use disposable income that they were no longer spending on going out. That made for buoyant sales, as well as very bullish prognostications: consumer shoppers, observers said, were unlikely to “go back” to physical shopping in the same numbers even after the pandemic subsided.
Lyst was a product of that: when it announced its $85 million raise, it planned for that to be its last fundraise ahead of an IPO, which it was planning potentially for London or New York as soon as this year.
At the time it said it had 150 million users and a catalog of 8 million products from 17,000 brands and retailers. That list of brands includes a number of high-end labels such as Balenciaga, Balmain, Bottega Veneta, Burberry, Fendi, Gucci, Moncler, Off-White, Prada, Saint Laurent and Valentino, and that combined with an active audience of shoppers led the company to strong growth. In 2020, gross merchandise value on Lyst was over $500 million. Between then and 2021, new user numbers grew 1100% and by the time the round was announced GMV was at more than $2 billion.
Fast forward to today, and the most optimistic and bullish prognostications in e-commerce have failed to play out: online sales have not continued with torrid growth, and people generally haven’t been spending as much online as a share of wallet with the return to in-store shopping.
That has led to some business contractions across the board. Amazon, the biggest of all e-commerce operations (which has been working to build out a strong line in fashion) may lay off as much as 10,000 staff and are cutting a lot of product lines. A more direct rival of Lyst’s, the high-end fashion e-commerce poster child Farfetch, currently has a market cap of just $2.9 billion, a giant drop compared to the $14 billion it commanded in May 2021.
Many look to the holiday season as a critical indicator of how well e-commerce companies are doing in the current economy, and this year so far, the figures are actually not as bad as many thought they would be: Adobe’s tracking of sales have shown big days like Black Friday and Cyber Monday both breaking sales records (respectively over $9 billion and over $11 billion).
Lyst itself has been seeing strong sales to kick off holiday shopping, posting its most profitable Black Friday weekend ever, with average order value up 15% — albeit with more discounting across the brands and stores that sell on the site to gin up activity.
But the bigger picture and the longer-term view are the factors driving today’s news. In addition to a focus on getting profitable, our source tells us that Lyst’s IPO was more recently targeted for 2023, but those plans have now been pushed back; and that it’s looking to do a new round of funding partly because it’s low on cash flow. (To be clear, the company would not comment on these facts.)
We’ll update this post as we learn more.
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Lyst, the UK fashion marketplace, is laying off 25% of staff by Ingrid Lunden originally published on TechCrunch
https://techcrunch.com/2022/11/29/lyst-the-uk-fashion-marketplace-is-laying-off-25-of-staff/
UK confirms removal of Online Safety Bill’s ‘legal but harmful’ clause
The UK government has completed a major revision to controversial but populist online safety legislation that’s been in the works for years — and was finally introduced to parliament earlier this year — but has been paused since this summer following turmoil in the governing Conservative Party.
In September, new secretary of state for digital, Michelle Donelan, said the reshuffled government, under newly elected prime minister Liz Truss (who has since been replaced by another new PM, Rishi Sunak) would make certain edits to the bill before bringing it back to parliament.
The draft legislation is now due to return to the House of Commons next week when lawmakers will resume scrutiny of the wide-ranging speech regulation proposals.
The government says the changes its made to the Online Safety Bill are in response to concerns it could lead to platforms overblocking content and chilling freedom of expression online — largely focused on adult safety provisions related to so-called ‘legal but harmful’ content, which included mitigation requirements like transparency obligations but did not actually require such material to be removed.
Nonetheless the controversy and concern over this aspect of the bill has been fierce.
In a press release announcing the latest raft of tweaks, the Department for Digital, Culture, Media and Sport (DCMS) and Secretary of state for digital issues, Michelle Donelan, wrote: “Any incentives for social media firms to over-remove people’s legal online content will be taken out of the Online Safety Bill. Firms will still need to protect children and remove content that is illegal or prohibited in their terms of service, however the Bill will no longer define specific types of legal content that companies must address.
“This removes any influence future governments could have on what private companies do about legal speech on their sites, or any risk that companies are motivated to take down legitimate posts to avoid sanctions. New measures will also be added to make social media platforms more transparent and accountable to their users, as a result of amendments the Government will propose.”
“Parents and the wider public will benefit from new changes to force tech firms to publish more information about the risks their platforms pose to children so people can see what dangers sites really hold. Firms will be made to show how they enforce their user age limits to stop kids circumventing authentication methods and they will have to publish details of when the regulator Ofcom has taken action against them,” DCMS added.
Writing in the Telegraph about her approach to revising the bill, Donelan said: “I have carefully amended the Online Safety Bill to ensure it reflects the values of our way of life — protecting children, safeguarding the vulnerable, protecting legal free speech and defending consumer choice. Protecting children is the fundamental reason why the Online Safety Bill was created, and so the changes I have made strengthen the child protection elements of the bill significantly.”
“The ‘legal but harmful’ clauses in the bill, in my view, violated the rights of adults to choose what legal speech they say and see. So I have removed ‘legal but harmful’ in favour of a new system based on choice and freedom,” she added. “Equally, if something is not prohibited in their terms and conditions, tech giants should not be removing it. Platforms will need to be far more transparent about how their algorithms work and, for the first time, users will have the right of appeal. Silicon Valley executives will no longer be able to arbitrarily silence people, nor continue to treat some sections of society differently.”
Over the weekend the government revealed another, related amendment to the legislation — saying it would make encouraging self harm a criminal offence, thereby taking that type of problem content out of the ‘legal but harmful’ bucket and meaning platforms will have a legal duty to remove it.
It also recently announced measures to beef up laws against abuse of intimate imagery, including criminalizing the sharing of deepfake porn without consent, among other recent changes.
‘Triple shield’
DCMS is pitching its new approach with the Online Safety Bill as providing what it frames as a “triple shield” of online protection which is most strongly focused on children but still offers measures intended to help general consumers shield themselves from a range of online harms — with social media firms legally required to 1) remove illegal content, 2) take down material in breach of their own terms of service, and 3) provide adults with greater choice over the content they see and engage with.
Provisions in the revised bill could, for example, enable adult users to opt to see a filtered feed if they wish to limit their exposure to content that may be unpleasant to them but which does not meet the bill’s higher bar of being strictly illegal.
The government has also retained measures aimed at empowering adults to be able to block anonymous trolls — via using tools that the biggest platforms will need to offer to let them control whether they can be contacted by unverified social media users.
“To make sure the Bill’s protections for adults online strike the right balance with its protections for free speech, duties relating to ‘legal but harmful’ content accessed by adults will be removed from the legislation and replaced with the consumer-friendly ‘triple shield’,” DCMS wrote. “The Bill will instead give adults greater control over online posts they may not wish to see on platforms.
“If users are likely to encounter certain types of content — such as the glorification of eating disorders, racism, anti-semitism or misogyny not meeting the criminal threshold — internet companies will have to offer adults tools to help them avoid it. These could include human moderation, blocking content flagged by other users or sensitivity and warning screens.”
Donelan mounted an aggressive defence of the changes on BBC Radio 4’s Today program this morning, claiming the government has strengthened provisions to protect children at the same time as adapting it to respond to concerns over the bill’s impact on freedom of expression for adults.
“Nothing is getting watered down or taken out when it comes to children,” she argued. “We’re adding extra in. So there is no change to children.”
Platforms will still be required to prevent children from being exposed to ‘legal but harmful’ speech, she also suggested — arguing that much of the content of greatest concern to child safety campaigners is often prohibited in platforms’ own T&Cs and the problem is they do not enforce them. The legislation will require platforms to live up to their claims, she said.
Earlier in the program, Ian Russell, the father of Molly Russell — the 14-year-old British schoolgirl who killed herself five years ago after viewing social media content promoting self-harm and suicide on algorithmically driven platforms including Instagram and Pinterest — expressed concern that the bill is being watered down, questioning the government’s late stage decision to remove the ‘legal but harmful’ duties clause.
“It’s very hard to understand that something that was important as recently as July — when the bill would have had a third reading in the Commons and [this legal but harmful content was] included in the bill, it’s very hard to understand why that suddenly can’t be there,” he told the BBC.
Discussing why he feels so strongly about risks attached to ‘legal but harmful’ content spreading online, Russell referred to the inquest into his daughter’s death which surfaced evidence from the platforms that showed she had engaged with a lot of such content — giving an example of a pencil-style drawing of a sad girl captioned with the text “who would love a suicidal girl” as one of the pieces of content she had viewed that had particularly stayed with him.
“That in and on its own isn’t necessarily harmful but when the platforms’ algorithms send hundreds if not thousands of those posts or posts like it to someone — particularly if they’re young and vulnerable — then that content had to be regulated against,” he argued. “The algorithms have to be looked into as well. And that’s what the concern is.”
Russell also accused platforms of not taking strong enough measures to prevent minors from accessing their services. “The platforms have not taken seriously the advances in age verification and age assurance that tech now has — they’ve not paid enough attention to that. They’ve sort of turned a blind eye to the age of people on their platforms,” he suggested.
While not embracing the government’s edits to ‘legal but harmful’ duties in the bill, Russell did welcome DCMS’ drive to dial up transparency obligations on platforms as a result of revisions that will require them to publish risk assessments — when previously they may have had to undertaken an assessment but would not have been required to publish it.
Asked by the BBC about Russell’s criticism of the removal of the ‘legal but harmful’ clause, Donelan said: “Content that is harmful or could hurt children but is not illegal — so is legal — will still be removed under this version of the bill. So the content that Molly Russell saw will not be allowed as a result of this bill. And there will no longer be cases like that coming forward because we’re preventing that from happening.”
She also argued the revised bill would force platforms to enforce their own age restrictions — such as by making them explain how they are stopping minors from accessing their services.
“We’ve strengthened the bill,” she reiterated. “We’ve now introduced clauses where companies can’t just say yes we only allow children over 13 to join our platform — then they allow ten year olds and actively promote it to them. We’re stopping that from happening — we’re saying no, you’ve got to enforce that age restriction, you’ve got to tell parents how you’re doing that and everybody else. We’re saying you’ve got to work to the regulator with the children’s commissioner when you’re producing the guidelines and putting them in practice.”
Asked how the government can be sure platforms will really ban underage users, Donelan pointed to what she described as the “very punitive sanctions” still in the bill — including fines of up to 10% of global annual turnover, adding: “If a company breaches any aspect of the bill, including for children, they could face fines… [as large as] billions of pounds. That’s a really big incentive not to breach the bill.”
She said the government has also strengthened this aspect of the bill — saying companies “do have to be assured of the age of their users”.
“Now we’re not saying you have to use ‘X specific tech’ because it will be out of date by next week — this bill has to last the test of time — what we are saying is you could use a range of age assurance technology or age verification technology but whatever you do you’ve got to make sure you know the age of these users to know whether they’re 14 or whether they’re 45 — so you know the protection have got to be in place and I think that’s the right approach.”
This component of the bill is likely to continue to face fierce opposition from digital rights campaigners who are already warning that biased AIs will likely be the tech that gets applied at scale to predict users’ age as platforms seek to meet compliance requirements — and that the legislation therefore risks automating discriminatory outcomes…
Another notable revision to the bill the government confirmed today is the removal of a “harmful communications” offence that free speech campaigners had warned risked having a major speech chilling effect based on a disproportionate weighting on someone taking offence to public speech.
Offences on false and threatening comms have been retained.
“To retain protections for victims of abuse, the government will no longer repeal elements of the Malicious Communications Act and Section 127 of the Communications Act offences, which means the criminal law will continue to protect people from harmful communications, including racist, sexist and misogynistic abuse,” DCMS further notes.
There will also be a requirement for major platforms not to remove content that does not breach the law or suspend or ban users where there has not been a breach of their ToS — as another measure the government claims will help bolster freedom of expression online.
Further amendments are aimed at dialling up protections for women and girls online, with the government saying it will add the criminal offence of controlling or coercive behaviour to the list of priority offences in the Bill.
“This means platforms will have to take proactive steps, such as putting in measures to allow users to manage who can interact with them or their content, instead of only responding when this illegal content is flagged to them through complaints,” per DCMS.
Another change recognizes the Children’s Commissioner to the face of the bill as a “statutory consultee” to the regulator, Ofcom’s, codes of practice, which platforms will be required to cleave to to shrink their legal risk — casting a key child safety advocate in a core role shaping compliance recommendations.
The government has tabled some of the slew of latest amendments to the Bill in the Commons for Report Stage on December 5, when it returns to parliament — but notes that further amendments will be made at later stages of the Bill’s passage.
Accompanying the revisions announcement, DCMS cites new polling from Ipsos — which it claims shows “overwhelming public backing for action” — citing stats from the survey that show 83% of people think social media companies should have a duty to protect children who are using their platforms (“only 4% disagree”); and eight in ten people (78%) want social media companies to be held accountable for keeping underage children off their platforms (7% disagree).
The survey found eight in ten people (81%) think the government should make sure social media companies protect children when they are online and 77% think social media companies should be punished if they don’t protect children, it also said.
Commenting in a statement, Donelan added:
“Unregulated social media has damaged our children for too long and it must end.
I will bring a strengthened Online Safety Bill back to Parliament which will allow parents to see and act on the dangers sites pose to young people. It is also freed from any threat that tech firms or future governments could use the laws as a licence to censor legitimate views.
Young people will be safeguarded, criminality stamped out and adults given control over what they see and engage with online. We now have a binary choice: to get these measures into law and improve things or squabble in the status quo and leave more young lives at risk.”
This report was updated to include a reference to the Ipsos survey cited by DCMS and to include additional remarks by Donelan published in the Telegraph newspaper
UK confirms removal of Online Safety Bill’s ‘legal but harmful’ clause by Natasha Lomas originally published on TechCrunch
https://techcrunch.com/2022/11/29/uk-online-safety-bill-legal-but-harmful-edit/