July 8, 2022
Illustration: Christopher T. Fong/Protocol
Hello, and welcome to Protocol Policy! Today we examine U.S. investors’ apparent confidence in China’s tech sector; look at the Irish Data Protection Commission, which is moving forward with a data requirement that Meta says would push it out of Europe; and try to figure out the Truth (Social) behind President Trump’s status on the board of Trump Media and Technology Group.
Parts of the U.S. government are trying to send a clear message: The economies of the U.S. and China are disentangling, and investment flows should be redirected accordingly.
A blockbuster VC funding round shows investors aren’t taking that message seriously. Amid all the bluster from the U.S. government, Sequoia Capital China raised $9 billion to fuel four new funds, amassing what could be the largest pool of capital ever directed toward China's technology sector.
Investors are betting we’re too reliant on China to meaningfully break ties. In 2021, the U.S. set a new record for imports, with China leading the world in selling goods to Americans. In fact, China sold around $506 billion worth of goods to the U.S. last year, more than the combined value of goods imported from Japan, Germany, India, South Korea and the United Kingdom.
China presents a major policy threat to Western investors. Wall Street probably remembers when the Chinese government stepped in to halt the highly anticipated IPO of Ant Group — or, for that matter, when Chinese regulators launched a probe against NYSE-traded DiDi that precipitated a 84% decline in its stock value. More formally, China has been preparing a blacklist that would limit Western cash from flowing into tech firms in sensitive industries. To spot the policy wild card, then, U.S. investors need to look beyond D.C.
Sen. Chuck Schumer is trying to rally support for semiconductor subsidies. The Senate Democratic leader is planning a classified briefing for the entire Senate on the state of global chipmaking competition. The competition bill that includes subsidies for semiconductors still needs to be reconciled between the House and Senate versions.
The Biden administration is weighing measures to slow China’s largest chipmaker. The Commerce Department wants to ensure the sanctions target SMIC without further hampering the global supply of chips, which is easier said than done. The measures would focus on limiting exports for chipmaking tools, per Reuters.
Two data brokers agreed to stop selling sensitive data around abortion visits. Sen. Elizabeth Warren announced that both SafeGraph and Placer.ai committed to not share that data in response to her request.A pro-union group wants the SEC to investigate Amazon over warehouse injury claims. The Strategic Organizing Center alleges Amazon’s 2021 letter to shareholders understated warehouse injury rates, which led BlackRock to vote against a related shareholder proposal. Amazon said there’s “no merit” to the allegation.
How to build an equitable and inclusive future: At the same time that the pandemic demonstrated all that is possible in an interconnected world, we saw in new and increasingly stark ways how certain communities continue to be marginalized and harmed by a persistent digital divide and how effectively that divide exacerbates our society’s other inequities.
A former asset manager for Celsius is taking the company to court in New York. KeyFi alleges it was not paid for work performed for Celsius and that the lender mismanaged customer funds.
Parents are suing TikTok for allegedly promoting the deadly “blackout challenge” to children. In a Los Angeles Superior Court, the two sets of parents said TikTok bears responsibility for the tragic deaths of their children, ages 8 and 9. The lawsuit also alleges TikTok didn’t warn parents about the addictive and dangerous nature of the app.
The Consumer Financial Protection Bureau is hiring tech talent to investigate Big Tech. As the CFPB looks to hold tech accountable for financial missteps, it wants to hire 25 technologists over the course of the coming year to probe new leads.
A threat intelligence firm suggests China is behind a social media campaign to oppose rare earth metal mining in the U.S. The firm, Mandiant, identified campaigns written under the guise of locals being outraged over plans to construct processing sites in places such as Texas.
The Irish Data Protection Commission could force Meta out of the EU. It drafted legislation on Thursday that would require Meta to keep user data in Europe rather than send it to servers in the U.S., where intelligence agencies have access. Meta has warned that it would suspend some services in Europe in response to such a decision. However, approving the measure would require approval from regulators across 26 EU member states, and that means it’s unlikely to coast through to the finish line.
India is accusing Chinese smartphone vendors of cheating taxes. The Indian Enforcement Directorate claimed Vivo shifted earnings abroad to reduce its taxes in India. The Chinese embassy spokesperson said the repeated investigations would “chill the confidence and willingness of market entities from other countries, including Chinese enterprises, to invest and operate in India.”
Government filings suggest President Trump left Truth Social’s board. Documents submitted to the Florida Department of State's Division of Corporations in June show Trump departed the board alongside Donald Trump Jr. just before the company received federal subpoenas investigating the SPAC. The company insisted, however, that Trump was still the board’s chairman, and refused to further explain the apparent discrepancy.
Snap hired the director of the Secret Service. James Murray retired from his government post to join Snap, where he’ll work on employee safety. Seems like overkill, but hey, Big Tech is ready to spend a lot on C-suite security: Meta reportedly spent $26.8 million on security for Mark Zuckerberg and his family in 2021.
More than a third: That’s the proportion of people in the U.S. who say they’re EV-curious, according to a new survey commissioned by Consumer Reports. The survey found 14% of the population would “definitely” buy or lease an EV, while 22% would “seriously consider” it. At the moment, only 2% of the population owns an EV. The White House wants half of vehicles sold in the U.S. to be electric by 2030.
How to build an equitable and inclusive future: There is so much more we need to do to make sure our future is more equitable and inclusive and maximizes America’s potential. It is not enough just to ensure everyone is connected. We also need to extend the full scope of digital opportunity to the people, the communities, and the institutions.
Does anyone scare Henry Kissinger? Apparently Elizabeth Holmes once did, according to a recent interview by Maureen Dowd. “When I go to board meetings, I feel like I have to ask permission to go to the bathroom,” Kissinger, who served on the board of Theranos, reportedly told Dowd. Kissinger added: “We were all afraid of her.”
Thanks for reading — see you Monday!