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Image: Element / Protocol

Google banned a decentralized messaging app, and it’s complicated

Element

Good morning and happy February! (Or, in COVID years, happy March 337th.) This Monday, Google banned a decentralized messaging app (and everything's complicated), what HBCUs want from Google, regulation is coming for the fintech world and Elon Musk's Clubhouse experience.

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The Big Story

Who watches the watchers?

Google booted an app called Element off the Play Store late Friday night, due to what Element said was "a report of extremely abusive content accessible on the matrix.org server." Confused? So was Google, it seems: Element promised to "explain how Element works and get the situation resolved," and soon after the app was back in the Play Store.

OK, quick catch-up: Matrix is a decentralized protocol that has become popular among a new set of messaging apps, such as Beeper, which we wrote about recently. Element is a Discord-ish app that runs on Matrix, and is built by the same people who maintain the Matrix protocol.

  • Matrix is having a moment, as users continue to reckon with the consequences of an internet dominated by a few huge companies. "At the beginning it was a very quixotic moonshot," Matrix co-founder Matthew Hodgson told me recently. "But now it feels like the rest of the world has caught up with us. The dangers of the walled garden are worse than anyone expected."
  • Matt Mullenweg called Element "the best candidate to be the WordPress of messaging," which is both high praise and a very handy analogy.

Matrix and Element are a way to circumvent companies such as Google for some people. But that protection doesn't amount to much when Google can just boot an app off the Play Store.

  • And it's not only that, the company argued: The "there's bad stuff on your service" argument would also require Google to ban every chat app, social network and browser on Android.

By Saturday, the app was back. But the whole episode raises complicated questions: What should Google do in a case like this? Who's responsible for what happens on a decentralized, private network? What if it's nobody? Is that the whole point? And it seemed to convince even more people that they need to wrestle control of the internet out of Big Tech's hands. That's an awfully tall order.

Diversity

How to work with HBCUs

Anna Kramer writes: Five HBCU presidents met with Sundar Pichai on Friday to talk about Google's "culture" problems. They told us beforehand they wanted to understand how Google was investigating the allegations of discrimination that followed the firing of AI ethics researcher Timnit Gebru and diversity recruiter April Christina Curley, and whether execs were making sure their grads are treated with respect.

  • Perhaps the most important player at the meeting was North Carolina A&T, the nation's largest producer of Black engineers.
  • The school is tired of being lumped together with all HBCUs, said Robin Coger, the dean of A&T's engineering program. Coger wants her students considered for their talents and education, and she wants big employers to stop dismissing the quality of the school just because it's a "historically Black" institution.

Dismissal appears to be exactly what's happening. This weekend, Google engineering director Leslie Miley shared a document that former Googlers made while at Twitter to explain their recruiting review process, which shows exactly how much power a certain set of elite schools and their graduates have in tech:

  • The document says candidates had to meet one of several criteria, including attending one of just 14 U.S. schools (which does not include any HBCUs); a stint working at a top firm such as Microsoft, Facebook, Amazon or LinkedIn (Yahoo, Oracle and Zynga were not acceptable); top mentions in big-name programming competitions; and so on. Non-traditional backgrounds, it makes clear, need not apply.
  • Curley tweeted last week that, along the same lines, Google's 2014 hiring documents said that "interview feedback case studies and curricula analysis demonstrate that current HBCU CS Departments are not graduating strong technical talent. HBCU CS students struggle with the most basic of coding, algorithms and data structures."
  • "TO BE CLEAR THESE ARE THE WORDS OF GOOGLE," she continued. "The time I spent recruiting at HBCUs says otherwise by the way. The kids at Howard and every other school I worked with are simply BRILLIANT. Period."

As for the Friday meeting? Both sides said the meeting went well, but the school presidents canceled the interviews they'd set up beforehand and gave only a blandly positive statement. Harry Williams, the Thurgood Marshall College Fund CEO who helped set up the meeting, said that Curley and Gebru's firings were not discussed. "That's a personnel matter," he told CNN.

Regulation

How to regulate Reddit. Sorry, I mean fintech.

We're not going to talk about GameStop all week, I promise. Even if I can't stop reading about how apparently silver is the next meme stock? Anyway, the more interesting long-term question here is what the Biden administration is going to do about regulating fintech.

Protocol's Tomio Geron tackled that very question, and found a few likely priorities:

  • Faster movement across the board. The SEC is going to have to act fast to figure out … something to do about the whole GameStop saga, though nobody knows exactly what that'll be. And in general, the government's regulatory metabolism on fintech is expected to kick back into gear.
  • "Consumer protection" is the name of the game, especially under Rohit Chopra at the CFPB. "Anything that smells like payday lending — that's so politically resonant — will get the lion's share of attention," Bradley Tusk, CEO of Tusk Ventures, told Tomio.
  • Crypto is under the microscope. Coinbase's Paul Grewal named three things he wants from the Biden administration, Tomio writes: "clarity in terms of regulation, constructive dialogue on using crypto for things like distributing stimulus funding or other money for people who are underbanked and progress toward a 'fed-backed digital dollar.'"
  • Who gets to see their financial data? There's this 75-word section of the Dodd-Frank Act that says consumers can access their financial data, but basically no details in it about what that means. (Thanks for that, Congress.) So while we endlessly debate the syntax and word order of Section 230, we'll also soon do that with Section 1033!

Related: India might ban some cryptos. Proposed legislation would set a framework for a national digital currency, and ban "all private cryptocurrencies" in India. It's unclear if Bitcoin would be affected.

A MESSAGE FROM SLACK

Slack

Why sales teams at Box and Segment rely on Slack to build stronger customer relationships and seal deals faster.

Read how sales organizations at Box and Segment are harnessing the power of channel-based messaging to keep communication strong, seal deals and streamline the sales cycle when everyone is remote.

Read more

People Are Talking

On Protocol: Epic VR storytelling is coming, said Within's Chris Milk, but the bar is really high:

  • "Your favorite Netflix show is likely going to be more compelling to you than the best VR short produced this year. That won't be forever, but it is the reality for most right now ...We need to deliver a more compelling story than your TV can."

Ray Dalio's thoughts on Bitcoin were a popular subject of conversation this weekend:

  • "Bitcoin has succeeded in crossing the line from being a highly speculative idea that could well not be around in short order to probably being around and probably having some value in the future. The big questions to me are what can it realistically be used for and what amount of demand will it have."

The argument against tech's data collection has gone too far, Facebook's Nick Clegg said:

  • "The caricature of shadowy figures in Star Trek uniforms manipulating our neural pathways in dark digital control rooms may make for great television, as in the Netflix film 'The Social Dilemma,' but it doesn't make the caricature any more true."

Reddit has an internal metric for antisocial users, Steve Huffman said, and it's got a fun name:

  • "Daily Active Shitheads."

Coming This Week

The GameStop games continue. With a weekend of closed markets, everyone's had time to think through what happens next — and we'll be watching to see what happens on Reddit, how Robinhood and others respond, and whether politicians and regulators are ready to step in.

Kuaishou is set to list on Friday at a reported valuation of $61 billion. Protocol's Hirsh Chitkara has everything you need to know.

The virtual Sundance Film Festival is still running this week, and there's lots of good stuff you can watch. (Including in VR.) Apple already broke the Sundance record by splashing out $25 million for the film "Coda."

Earnings season week three! Google, Amazon, Qualcomm, Spotify, Snap, Pinterest, eBay, Alibaba and a bunch of others all report this week.

In Other News

  • Xiaomi is suing the U.S. over its investment ban. It said it faced "imminent, severe, and irreparable harm." Meanwhile, CFIUS has a new team scrutinizing VC deals that might have links to China.
  • Facebook's getting a new head of U.S. public policy now that Kevin Martin will lead its global team for economic policy. Facebook will look externally for a new U.S. head.
  • Tech CEOs keep calling Australia. Mark Zuckerberg called lawmakers there last week to discuss the country's news licensing rules; Satya Nadella told Prime Minister Scott Morrison that Bing could replace Google Search if Alphabet decides to block Australians.
  • Hyundai's torn about working with Apple, Reuters reported. The two companies reportedly first held talks about a car partnership in 2018, but Hyundai's reluctance to work with other companies has supposedly held things back.
  • The SolarWinds hack goes beyond SolarWinds. Investigators say that 30% of victims didn't use the SolarWinds software, with the suspected Russian hackers instead using vulnerabilities in Microsoft products.
  • Some Alphabet Workers Union members were blindsided by the announcement of an international alliance. According to The Verge, the announcement included a quote from AWU's Parul Koul, "which she says she didn't write."
  • Elon Musk's appearance on Clubhouse was a huge event, and Clubhouse clearly wasn't ready; the app barely stayed up, and rooms and overflow rooms filled to capacity. I wound up watching a livestream of a guy holding up his iPad to the camera as Musk talked about getting to Mars (in five and a half years, apparently) and why his memes are so sick, before interrogating Robinhood's Vlad Tenev about last week's events. It was quite an evening.
  • Anne Hathaway will play Rebekah Neumann in Apple's new WeWork show. Jared Leto is playing Adam.

One More Thing

It's pronounced 'the stonk market'

You know a story's really made the rounds when it makes the SNL cold open. That's what happened with GameStop this weekend. If you haven't seen the skit, which also features chin-bearded Jack Dorsey and one of the more delightful Mark Zuckerberg impressions I can remember, you should. Live from New York, everything is chaos.

A MESSAGE FROM SLACK

Slack

Why sales teams at Box and Segment rely on Slack to build stronger customer relationships and seal deals faster.

Read how sales organizations at Box and Segment are harnessing the power of channel-based messaging to keep communication strong, seal deals and streamline the sales cycle when everyone is remote.

Read more

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

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