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December 7, 2020
Walmart has shut down Insperience, the Los Angeles-based VR startup formerly known as Spatialand. The retail giant acquired Spatialand in early 2018, and operated it as a subsidiary out of its Store No. 8 incubator. A Walmart spokesperson confirmed the closure, but did not comment on any layoffs.
"After nearly three years of successfully testing, learning and building, we've decided it's not the right time to continue to invest in Insperience, our v-commerce startup inside Store No8," a Walmart spokesperson said via email. "What we have learned about virtual reality, [its] applications in retail, and the current opportunity for VR-enabled commerce has been invaluable. We will continue to explore opportunities within mixed reality, among other areas, while keeping the Walmart customer at the center of our explorations."
Spatialand was hired by Walmart in 2017 to produce a VR showcase for Store No. 8's Innovate conference. In February 2018, the retail giant acquired Spatialand to explore VR shopping solutions. In early 2020, the startup rebranded as Insperience, promising to forge "deep relationships between brands and consumers through immersive, personalized shopping experiences," according to its now-defunct website.
While the pandemic has resulted in a growing interest in new ways to shop online, Insperience at least initially focused more on in-store use of VR. In 2019, the company teamed up with Dreamworks to bring a VR experience based on the film "How to Train Your Dragon: The Hidden World" to select Walmart locations, complete with Positron motion chairs.
Walmart was just one of many companies to bet on location-based VR as a way to give consumers who don't yet own VR devices access to immersive experiences. However, the prospect of sharing VR headsets with strangers has been a lot less appealing to consumers since the beginning of the pandemic, with VR centers and arcades shutting down for months across the globe.
U.S.-based VR startups have been hit especially hard by the crisis. Sandbox VR filed for bankruptcy this summer, and location-based VR pioneer The Void recently had its assets acquired by a lender.
Janko Roettgers
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
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Yes, GameStop is a content moderation issue for Reddit
The same tools that can be used to build mass movements can be used by bad actors to manipulate the masses later on. Consider Reddit warned.
WallStreetBets' behavior may not be illegal. But that doesn't mean it's not a problem for Reddit.
Image: Omar Marques/Getty Images
January 27, 2021
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
January 27, 2021
The Redditors who are driving up the cost of GameStop stock just to pwn the hedge funds that bet on its demise may not be breaking the law. But this show of force by the subreddit r/WallStreetBets still represents a new and uncharted front in the evolution of content moderation on social media platforms.
In a statement to Protocol, a Reddit spokesperson said the company's site-wide policies "prohibit posting illegal content or soliciting or facilitating illegal transactions. We will review and cooperate with valid law enforcement investigations or actions as needed."
<p>It's still unclear whether any such investigations will result from this, and White House press secretary Jen Psaki said that Treasury Secretary Janet Yellen is "monitoring" the situation. But the fact is, Reddit writes lots of site-wide rules that have nothing to do with whether certain behavior is illegal. Reddit is <a href="https://www.protocol.com/reddit-powermods-war" target="_blank">unique among platforms</a> in that it leaves much of its content decisions to the moderators of different subreddits. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Still, the company does have rules. It <a href="https://www.reddithelp.com/hc/en-us/articles/360043071072" rel="noopener noreferrer" target="_blank">prohibits</a>, for example, "directing unwanted invective at someone" or "following them from subreddit to subreddit," classifying that as harassing, bullying behavior. Redditors aren't allowed to send "large amounts of private messages to users who are not expecting them" or repeatedly post "unrelated/off-topic/link-farmed content," because, under Reddit's <a href="https://www.reddithelp.com/hc/en-us/articles/360043504051" rel="noopener noreferrer" target="_blank">rules</a>, that's spam.</p><p>That means if Reddit decides that what r/WallStreetBets is doing is dangerous or disruptive, it could very well take action. That would be tricky for Reddit. Given the range of offensive stuff that regularly appears on the platform, it could be tough to justify outlawing stock trade tips. So far, that hasn't happened, and the Reddit spokesperson was unable to comment on whether any content policies related to the GameStop issue might be implemented in the future. Reddit co-founder Alexis Ohanian, for one, seemed unconcerned in a Twitter <a href="https://twitter.com/alexisohanian/status/1354407436732387335?s=20" rel="noopener noreferrer" target="_blank">thread</a> Wednesday. "It's a perfect storm at a time when lots of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught Ls during a /global pandemic/ over the last year," Ohanian wrote. "This is something to believe in."</p><p>That may be true for now. But experts on social media manipulation argue the model WallStreetBets has created could morph into a bigger long-term problem for Reddit. "The WallStreetBets manipulation of [GameStop] is now the best template for how one could monetize an influence operation," <a href="https://twitter.com/alexstamos/status/1354499573209653251?s=20" rel="noopener noreferrer" target="_blank">tweeted</a> Stanford researcher Alex Stamos who, as Facebook's former chief security officer, worked on detecting and rooting out foreign influence operations after the 2016 election. "I don't know if any laws were broken this time, but Reddit now has a problem: it is the home for a community of hundreds of thousands of people who have demonstrated the ability to move billions of dollars based upon the urging of, at most, a couple dozen anonymous accounts."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Facebook's current chief security officer, Nathaniel Gleicher, agreed with Stamos, <a href="https://twitter.com/ngleicher/status/1354517057673392129?s=20" rel="noopener noreferrer" target="_blank">tweeting</a>: "Good reminder that while political [information operations are] a serious threat, there are many harmful cases of these tactics driving financial gain."</p><p>Gleicher added: "[Money] is a driver across security threats, from hacking to phishing to good old bank fraud, & [information operations are] no exception. Getting ahead of how these tactics enable fraud is essential to disincentivize bad actors."</p><p>To be clear: There's no evidence that the GameStop mob has any ties to a malicious influence operation, and aside from some hedge funds that tried to short GameStop in the first place, it's not immediately obvious who WallStreetBets is hurting. What are hedge funds anyway if not an institutionally sanctioned pool of people betting on the success or failure of businesses for profit? For now, it's easy to root for the underdogs banding together to stick it to the man. </p><p>But one thing that seems obvious from the last decade or more on the internet is that the same tools that can be used to build mass movements — be they political or financial — can be used by bad actors to manipulate the masses later on. If and when that happens, Reddit will have few excuses for not being prepared. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
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After loan default and asset transfer, The Void's future looks uncertain
The location-based VR pioneer lost Disney as a key partner earlier this year.
Multiple industry insiders told Protocol that The Void had been trying to secure more funding throughout the year. It appears that those efforts failed.
Photo: Veronique Dupont/Getty Images
November 17, 2020
Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
November 16, 2020
Things are looking grim for The Void, once hailed as the future of virtual reality. The company recently defaulted on a key loan, forcing it to permanently transfer its assets, including patents and trademarks, to its creditor, according to documents reviewed by Protocol. Its financial troubles also led to Disney terminating a longstanding partnership, which means that The Void won't be able to use some of its most popular VR experiences based on Disney IP anymore.
Jim Bennett, the new owner of the company's assets, confirmed the transaction in a statement provided to Protocol, and said he planned either to sell the assets, or resume operations after the pandemic subsides.
<p>"The context for our actions is that malls were shut down due to the pandemic and it was apparent that they would not be opening up for a while," he wrote. "We had to take control of the assets and inform the relevant agencies that we were taking over ownership and management of the registered IP as part of our business plan."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>A spokesperson for The Void did not respond to multiple requests for comment.</p><p>The Void operated more than a dozen VR centers across North America, Europe, Asia and the Middle East, with plans to launch a number of additional locations around the world soon. Ticket-paying customers would put on a modified VR headset connected to a special backpack and freely roam across a stage with doors, levers and other physical props that made for more believable immersive virtual worlds. Some of the experiences shown were based on blockbuster franchises like "Ghostbusters," "Star Wars" and "Jumanji."</p><p>All of those locations had to shut down this spring due to the pandemic. However, the company's financial troubles began long before COVID-19 hit the U.S. Court documents show that the startup was unable to pay for millions of dollars of equipment last summer. At the time, the company's then-CFO promised to pay up as soon as expected financing went through, and thanked the supplier "for being patient," according to <a href="https://docdro.id/Gux7p57" rel="noopener noreferrer" target="_blank">one legal filing</a>. The supplier never got its money and sued; the lawsuit ultimately got settled this month. </p><p>It's unclear how much money exactly The Void raised since its founding in 2015. Funders included Verizon Ventures, Qualcomm Ventures and James Murdoch's Lupa Systems. Murdoch's VC company wrote two checks for The Void in 2019, according to a person familiar with the transaction. The Void announced <a href="https://www.businesswire.com/news/home/20191016005944/en/The-VOID-Announces-Strategic-Investment-From-Lupa-Systems-and-Unibail-Rodamco-Westfield" rel="noopener noreferrer" target="_blank">a $20 million cash injection</a> from Lupa Systems in July 2019.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>The startup underwent some leadership changes in recent months, with former Lululemon CEO Laurent Potdevin assuming the role of the CEO. Potdevin was forced out at Lululemon in early 2018 over an inappropriate relationship with a staff member, <a href="https://www.cnbc.com/2018/02/06/lululemon-ceo-laurent-potdevin-had-inappropriate-employee-relationship.html" rel="noopener noreferrer" target="_blank">CNBC reported at the time.</a></p><p>Documents filed with the U.S. Patent and Trademark Office <a href="https://tsdr.uspto.gov/caseviewer/assignments?caseId=86518836&docIndex=1&searchprefix=sn#docIndex=1" rel="noopener noreferrer" target="_blank">show</a> that The Void raised debt funding from Bennett in August 2019. To secure that loan, The Void put up its assets as collateral; VR Boom LLC, a company owned by Bennett, was assigned The Void's patents and trademarks as a security interest earlier this year.</p><p>That loan, and The Void's apparent inability to pay it back, also seems to have triggered Disney's breakup with the company. <a href="https://wdwnt.com/2020/07/the-void-at-downtown-disney-district-permanently-shut-down-due-to-license-agreement-breach-disney-springs-location-potentially-affected/" rel="noopener noreferrer" target="_blank">Documents posted</a> at The Void's former storefront in Florida's Disney Springs show that Disney terminated its licensing agreement for The Void's "Star Wars," "Wreck-It Ralph" and "Avengers" VR experiences due to a proposed asset transfer to the lender at the end of June. Without the rights to use Disney's IP, the entertainment giant immediately pulled the plug on The Void's leases at Disney's Florida and Southern California properties. A Disney spokesperson declined to comment.</p><p>Multiple industry insiders told Protocol that The Void had been trying to secure more funding throughout the year. It appears that those efforts failed: Documents filed with the U.S. Patent and Trademark Office <a href="https://tsdr.uspto.gov/caseviewer/assignments?caseId=86518836&docIndex=3&searchprefix=sn#docIndex=3" rel="noopener noreferrer" target="_blank">in recent days reveal</a> that the company agreed to transfer "substantially all of [its] property," including key patents and trademarks, to Bennett in October. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>The corporate entities used for that asset transfer tell much of the story of The Void's fall from grace: After getting a loan from VR Boom LLC last year, The Void's assets are now being held by a new holding company aptly named VR Exit LLC.</p><p>Without Disney's IP, it's unlikely that any reincarnations of The Void would be able to sustain anything close to its original retail footprint and expansion ambitions. The startup had a habit of using prime real estate for its VR centers, with locations including the Grand Canal Shoppes at The Venetian Resort in Las Vegas, the World Trade Center in New York and the Mall of America in Minneapolis. </p><p>The Void's chief marketing officer, Jamie Apostolou, <a href="https://www.protocol.com/location-based-vr-covid-19" target="_self">told Protocol in June</a> that the company was gearing up to reopen some of these locations with increased safety protocols in place, but also admitted keeping prime real estate with limited attendance wouldn't be easy. "It's going to be a challenge for everybody, ourselves included," Apostolou said at the time.</p><p>The startup isn't the only company struggling to take VR to malls and movie theaters amid the pandemic. Competitor Sandbox VR, which had been backed by investors including Will Smith, Justin Timberlake and Katy Perry, <a href="https://www.wsj.com/articles/virtual-reality-company-sandbox-vr-files-for-bankruptcy-11597359561" rel="noopener noreferrer" target="_blank">filed for bankruptcy in August.</a> Still, some industry insiders believe that location-based VR could reemerge after the pandemic subsides. VR headsets like Facebook's Oculus Quest are growing in popularity, prompting consumers to give the medium another look. At the same time, these headsets will never be able to offer the same level of immersion as VR experiences like the ones shown by The Void.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>Bennett echoed those sentiments in his statement. "Given the fact that two companies are moving toward release of Covid-19 vaccines with 90 to 95 percent effectiveness rates we are quite confident that malls will be re-opening and that location-based VR will be back in high demand," he wrote. "Beyond malls, we are looking at a bright future for location-based VR at professional sports venues, concerts etc. This technology is also extremely valuable for training police and first responders."</p>
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Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.
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Investors didn’t like Ubisoft and Activision’s earnings
Both stocks plunged on the companies' forecasts.
The outlook is good for console manufacturers, but not so much on the software side.
Image: Protocol
October 30, 2020
Shakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
October 30, 2020
Big Tech companies weren't the only ones reporting earnings this week; some of the biggest players in the gaming industry were, too. And there was a sharp divide: While the outlook's good for console manufacturers, things are less peachy on the software side.
Sony and Microsoft both reported earlier in the week, and both companies' gaming divisions had pretty good quarters. While PS4 sales dropped, unsurprisingly, software and subscription revenue soared. And an optimistic outlook for the PS5 — Sony's hoping to sell 7.6 million by the end of March — and the subscription and software sales that should entail, led Sony to raise its full-year operating income forecast by 13%.
<ul class="ee-ul"><li>It was a similar state of affairs for Xbox. <a href="https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/SlidesFY21Q1.pptx?version=745c4648-a7a7-5640-a515-8195e7b5b6b6" rel="noopener noreferrer" target="_blank">Overall gaming revenue</a> was up 22% year-on-year, driven by a 30% boost in gaming content and services. Both companies' results were a reminder that as game purchases shift toward digital, console manufacturers stand to win big.</li><li>Facebook, the newest entrant to the console wars, is also doing well: It said Oculus Quest 2 preorders were <a href="https://www.theverge.com/2020/10/30/21541535/oculus-quest-2-preorders-sales-developers-zuckerberg" rel="noopener noreferrer" target="_blank">five times higher</a> than the original Quest's, <a href="https://www.protocol.com/newsletters/gaming/is-vr-finally-going-mainstream?rebelltitem=4#rebelltitem4" target="_self">confirming Protocol reporting</a> that the new VR headset is a huge hit.</li></ul><p><strong>But buried in Microsoft's release was one worrying number.</strong> While a 30% boost in content and services revenue is good, it's a far cry from the 65% growth it reported in the previous quarter. That's reflective of a broader trend: Gaming's COVID-accelerated growth is slowing down.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><ul class="ee-ul"><li>Take Activision, for instance. Though it <a href="https://venturebeat.com/2020/10/29/activision-blizzard-beats-expectations-with-1-95-billion-in-revenue-for-q3-2020/" rel="noopener noreferrer" target="_blank">beat expectations</a>, its monthly active user numbers were down from 125 million in Q2 to 111 million in Q3. And its "tepid forecast," <a href="https://www.bloomberg.com/news/articles/2020-10-29/activision-falls-after-issuing-cautious-fourth-quarter-outlook?sref=18veDlX6" rel="noopener noreferrer" target="_blank">as Bloomberg put it</a>, led to a sizable stock drop Friday.</li><li>Ubisoft's situation is even worse, thanks to <a href="https://www.eurogamer.net/articles/2020-10-29-ubisoft-delays-far-cry-6-and-rainbow-six-quarantine-in-latest-financial-report" rel="noopener noreferrer" target="_blank">COVID-linked delays</a> of the new Rainbow Six and Far Cry games. It <a href="https://uk.finance.yahoo.com/news/ubisoft-cuts-full-guidance-covid-193705495.html" rel="noopener noreferrer" target="_blank">cut its full-year forecast</a> as a result, and its stock plunged 7%.</li></ul><p>To be sure, the situation isn't awful: Growth is still strong. But it does seem that the huge boom from earlier in the year is coming to an end, and we're approaching something more like normality again. In a market with consistently high expectations, normal often isn't good enough.</p><p><em>This story will feature in Protocol Gaming, our weekly guide to the business of gaming. </em><a href="http://protocol.com/newsletters" rel="noopener noreferrer" target="_blank"><em>Subscribe here</em></a><em>.</em></p>
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Shakeel Hashim ( @shakeelhashim) is a growth manager at Protocol, based in London. He was previously an analyst at Finimize covering business and economics, and a digital journalist at News UK. His writing has appeared in The Economist and its book, Uncommon Knowledge.
Protocol | China
More women are joining China's tech elite, but 'Wolf Culture' isn't going away
It turns out getting rid of misogyny in Chinese tech isn't just a numbers game.
Chinese tech companies that claim to value female empowerment may act differently behind closed doors.
Photo: Qilai Shen/Getty Images
January 27, 2021
Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.
January 27, 2021
A woman we'll call Fan had heard about the men of Alibaba before she joined its high-profile affiliate about three years ago. Some of them were "greasy," she said, to use a Chinese term often describing middle-aged men with poor boundaries. Fan tells Protocol that lewd conversations were omnipresent at team meetings and private events, and even women would feel compelled to crack off-color jokes in front of the men. Some male supervisors treated younger female colleagues like personal assistants.
Within six months, despite the cachet the lucrative job carried, Fan wanted to quit.
A woman we'll call Zhang had a similar experience at her former employer, Baidu. She told Protocol that senior colleagues joked that Zhang and her younger female coworkers were hired to "please their eyes."
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Alibaba and Baidu look and act like they value female empowerment. Alibaba, the ecommerce giant, hosts a <a href="https://www.alizila.com/speakers-talk-womens-empowerment-at-alibaba-conference/" rel="noopener noreferrer" target="_blank">Global Conference on Women and Entrepreneurship</a> every year. Its founder, Jack Ma, has <a href="https://www.youtube.com/watch?v=wUuEryO0ogg" rel="noopener noreferrer" target="_blank">positioned</a> himself as a champion for women and has repeatedly said that Alibaba <a href="https://www.qianzhan.com/people/detail/271/140925-908063c9.html" rel="noopener noreferrer" target="_blank">owes its success to its female workers</a>. Ma has touted the company's <a href="https://ishare.ifeng.com/c/s/7pVlMyNV25i" rel="noopener noreferrer" target="_blank">relatively hefty share</a> of women in top management — currently, <a href="https://www.alibabagroup.com/cn/about/leadership" rel="noopener noreferrer" target="_blank">six out of 14</a> of the most senior roles are staffed by women. Search engine behemoth Baidu, too, likes to<a href="http://d.youth.cn/newtech/202012/t20201230_12640898.htm" rel="noopener noreferrer" target="_blank"> tout</a> its relatively high ratio — <a href="http://esg.baidu.com/Uploads/File/2020/06/18/u5eeb598d72472.pdf" rel="noopener noreferrer" target="_blank">46%</a> — of women in management.
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"Workplace equality is a core value of Baidu. Female employees account for 43% of Baidu's workforce and 46% of management. Women play significant roles as top executives of the company driving technology innovation and strategy," Baidu said in an email reply. Alibaba did not respond to Protocol's requests for comment.
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So why do women like Fan and Zhang have such a rough go of it?
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This is the terrible paradox at the heart of Chinese tech, one that will threaten its capacity to innovate in the future. A wave of Chinese women are joining elite tech companies and their boardrooms, often in numbers that compare favorably to tech industries abroad, but it turns out that getting rid of sexism is far more than a numbers game. Women in Chinese tech are marginalized, demoralized and exhausted. When they get home, they're still expected to shoulder most of the childcare and household chores.
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The result: Those who manage to ascend have to learn to play — and win — a man's game. This paradox is going to sharpen as more women enter tech and become aware of gender inequality.
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Women are increasingly populating Chinese tech offices. Data shows that some of China's biggest internet companies, including <a href="https://pic2.zhimg.com/80/v2-64ca7bcc8aa012b59dbd90cdb6c7b809_1440w.jpg" target="_blank">ByteDance</a>, <a href="http://esg.baidu.com/Uploads/File/2020/06/18/u5eeb598d72472.pdf" rel="noopener noreferrer" target="_blank">Baidu</a> and ride-hailing giant <a href="https://www.yicai.com/news/5260027.html" rel="noopener noreferrer" target="_blank">Didi Chuxing</a>, each employ at least 40% female staff. By way of comparison, <a href="https://www.statista.com/chart/4467/female-employees-at-tech-companies/" rel="noopener noreferrer" target="_blank">statistics show</a> that female employees fill between 28% and 42% of roles at America's five largest tech companies. In India, women make up <a href="https://go.451research.com/women-in-tech-india-employment-trends.html" rel="noopener noreferrer" target="_blank">34%</a> of the tech workforce; in the U.K., the figure is <a href="https://technation.io/insights/diversity-and-inclusion-in-uk-tech-companies/" rel="noopener noreferrer" target="_blank">19%</a>.
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Women have also made it into Chinese tech leadership. <a href="https://www.svb.com/trends-insights/reports/women-in-technology-2019" rel="noopener noreferrer" target="_blank">Seventy percent</a> of Chinese startups have at least one female executive, a higher proportion than companies in the U.S., U.K. and Canada, according to a 2019 survey conducted by Silicon Valley Bank. And more than 1,000 women have<a href="https://xw.qq.com/cmsid/20200308A0L9J400" rel="noopener noreferrer" target="_blank"> made it into the boardrooms</a> of China's public tech companies, according to a study conducted by Tianyancha, a data technology service company.
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Yet Alibaba and Baidu are not the only "greasy" companies. Leading Chinese tech firms, including Tencent, have posted job ads depicting their female employees as "pretty" or "goddesses" to attract male candidates, according to a <a href="https://www.hrw.org/report/2018/04/23/only-men-need-apply/gender-discrimination-job-advertisements-china#_ftn99" rel="noopener noreferrer" target="_blank">2018 Human Rights Watch report</a>. In 2017, WeChat's parent company Tencent apologized after <a href="https://www.sixthtone.com/news/1815/video-of-women-on-their-knees-deals-blow-to-tencent-image" rel="noopener noreferrer" target="_blank">footage emerged</a> of a corporate event where female employees were kneeling while using their teeth to open water bottles placed between men's legs. A <a href="https://www.digitaling.com/articles/16221.html" rel="noopener noreferrer" target="_blank">2012 job ad</a> for food-delivery group Meituan declared that "finding a job equals finding a woman," featuring a suggestive image of a thong hanging between a woman's legs. "Do what you most want to do," the ad concluded, using a verb for "do" that colloquially means "fuck." In the years since, Meituan has repeatedly depicted young women in its promotional ads as <a href="https://www.yunyingpai.com/extend/518996.html" rel="noopener noreferrer" target="_blank">food on the plate</a> for delivery.
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In gender studies, the <a href="https://tidsskrift.dk/scandinavian_political_studies/article/download/32616/30682" rel="noopener noreferrer" target="_blank">theory of critical mass</a> hypothesizes that deliberative bodies must be made up of at least <a href="https://www.un.org/womenwatch/daw/egm/eql-men/index.html#:~:text=Women%20have%20gained%20the%20right,States%20of%20the%20United%20Nations.&text=The%20figure%20of%2030%20percent,content%20of%20political%20decision%2Dmaking." rel="noopener noreferrer" target="_blank">30%</a> women to impact policymaking. But at least when it comes to tech, it's clear that neither a high percentage of female execs nor a workforce approaching gender parity equate to workplace equality. Julie Yujie Chen, who teaches at the University of Toronto and has researched the experience of Chinese women in tech, doesn't believe the presence of more women executives in a Chinese tech company will work in favor of female employees. "Women in tech is not a representation issue," she told Protocol. "It is about challenging the norms."
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Lin Zhang, an assistant professor at the University of New Hampshire who has interviewed dozens of female entrepreneurs in China's tech companies, said many of the women who thrive in this ultra-competitive, male-dominated industry not only have become resigned to workplace masculinity and sexism, but have internalized it. "Because of the generally hostile gender culture in China, there's not much solidarity among women," Zhang said. "Now that they're up there, they feel like, 'I have paid my dues. It's your turn.'"
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Alibaba's Fan echoes this: "Although women are much present in Alibaba's senior management, they all have transformed themselves to be greasier than the men. That's how they entered that powerful circle."
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Shi is a 30-year-old manager of a content-producing team at Nasdaq-listed video-sharing platform Bilibili. Like Fan and the other female tech workers interviewed for this story, she spoke to Protocol on the condition that she be identified by a pseudonym to avoid retaliation from her employer. Shi said the women in her company leadership "completely subscribe to the 'wolf' mentality. They are just as territorial, aggressive and exploitative as the men."
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One result is tech products that objectify women and reinforce gender stereotypes, at least in the way they are marketed and used. Didi Chuxing is helmed by a woman — company president Jean Liu — and Didi's staff was <a href="https://www.yicai.com/news/5260027.html" rel="noopener noreferrer" target="_blank">40%</a> female in 2017, the most recent year for which statistics are available. However, it encountered scandal with Hitch, a carpooling service launched in 2015 that suggested hookups between drivers and passengers in its 2018 <a href="https://new.qq.com/omn/20180828/20180828A08PZK.html" rel="noopener noreferrer" target="_blank">ads</a>. Two female Hitch passengers were <a href="https://www.nytimes.com/2018/08/26/business/didi-chuxing-murder-rape-women.html?smtyp=cur&smid=tw-nytimesworld" rel="noopener noreferrer" target="_blank">raped and killed</a> that same year. The general manager at Hitch was a woman named Huang Jieli.
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Even relatively "woke" Chinese companies demand a lot of their employees. A major culprit is Chinese tech's infamous 996 work schedule — 9 a.m. to 9 p.m., six days per week — which can wear workers down. I spoke with most interviewees after 10 p.m. in China, after they had finished a long day's work. Message alerts from colleagues often interrupted our conversations.
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This work culture further disadvantages women because of the larger milieu in which they live. Women still shoulder most of the childcare and housework burden in Chinese households. A 2019 National Bureau of Statistics <a href="https://cnlgbtdata.com/files/uploads/2020/01/%E4%B8%AD%E5%9B%BD%E7%A4%BE%E4%BC%9A%E4%B8%AD%E7%9A%84%E5%A5%B3%E4%BA%BA%E5%92%8C%E7%94%B7%E4%BA%BA2019EN-final.pdf" rel="noopener noreferrer" target="_blank">report</a> showed that women spent more than twice as much time as men on unpaid household work. "The lack of reliable childcare service becomes a structural barrier for women to advance their career," said Chen, "especially in sectors like the tech industry."
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Although a large number of young Chinese women have joined tech, they are more likely to concentrate at the lower end of the skill and productivity spectrum, such as human resources, public relations and business operations. Programming, often the power center, remains a male-dominated division, with female programmers comprising only 10.4% of its ranks in 2020, according to a<a href="https://zhuanlan.zhihu.com/p/109185515" rel="noopener noreferrer" target="_blank"> report by Chinese digital working platform Proginn</a>. (In the U.S., figures range between <a href="https://www.statista.com/statistics/1126823/worldwide-developer-gender/" rel="noopener noreferrer" target="_blank">8%</a> and <a href="https://www.frgconsulting.com/blog/female-developers-workforce/" rel="noopener noreferrer" target="_blank">11%</a>.)
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Of course, China has its share of relatively egalitarian companies. Take ByteDance. While it spent last year at the center of U.S. controversy over data-sharing with Beijing, it's seen at home as valuing diversity and inclusion. Dong, who works in the ByteDance HR department, told Protocol she chose the company for its relatively egalitarian culture. It was the only prospective employer that did not inquire about her marital status when she was job-hunting in 2018, and the supervisor of the department she was interviewing for was a woman in her late 30s.
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But Dong thinks ByteDance is swimming against the tide. She says several senior female colleagues in her team still had to quit because they couldn't juggle work and childcare demands. It's not a problem unique to China, but female workers there are getting less help than in other countries. "Tech companies in other countries are trying to create a better environment for female workers who face similar social expectations," Dong said. "But in China, they won't specifically create supportive policies for you. The baseline is lower. It's like, 'I'm already doing well by not treating you badly.'"
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Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.
Power
Trump gets a TikTok deal, but ByteDance keeps a lot of the power
President Trump has approved a plan for Oracle to process TikTok's U.S. data and take a minority stake in the company. But the announcement was short on details about ByteDance.
The deal, which is still awaiting official government approval, follows weeks of negotiations about TikTok's fate in the U.S.
Photo: Solen Feyissa/Unsplash
September 21, 2020
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.
September 19, 2020
TikTok, Oracle and Walmart announced Saturday that they've reached a deal that will enable TikTok to continue operating in the U.S. and thwart a ban on new TikTok downloads in the U.S. that was set to take effect Sunday night. President Trump signaled his approval for the deal on Saturday, though it is still pending official approval by the U.S. and Chinese governments. Under the agreement, Oracle and Walmart will take minority stakes in TikTok, with Oracle processing TikTok's U.S. data.
"We are 100% confident in our ability to deliver a highly secure environment to TikTok and ensure data privacy to TikTok's American users and users throughout the world," Oracle CEO Safra Catz said in a statement announcing the deal. "This greatly improved security and guaranteed privacy will enable the continued rapid growth of the TikTok user community to benefit all stakeholders."
<p>The news follows weeks of negotiations over how the company could satisfy President Trump's August <a href="https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/" rel="noopener noreferrer" target="_blank">executive order</a>, which prohibited any transactions with TikTok's Chinese parent company, ByteDance, after Sept. 20. That order led to speculation, including from the president himself, that TikTok would have to be sold or else risk being shut down. The Commerce Department on Friday said Apple and Google would have to remove the app from their stores over the weekend and that TikTok would face a more stringent ban by Nov. 12 if its national security concerns were not resolved. On Saturday, Secretary of Commerce Wilbur Ross <a href="https://www.commerce.gov/news/press-releases/2020/09/statement-delayed-prohibitions-related-tiktok" rel="noopener noreferrer" target="_blank">confirmed</a> that the administration would delay the impending ban "in light of recent positive developments." </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>As part of the deal, TikTok committed to expanding its U.S. headquarters and adding 25,000 jobs in the country. It's also working on a "commercial partnership" with Walmart. Walmart said that while "there is still work to do on final agreements," it has agreed to purchase 7.5% of TikTok Global and provide ecommerce and payments services to the app. </p><p>TikTok said both Walmart and Oracle would take part in a pre-IPO round of financing, through which they could take a "20% cumulative stake" in the company." "Our team works tirelessly to provide a safe and inclusive platform and we're thrilled that we will be able to continue serving our amazingly diverse and creative community," the company wrote in a <a href="https://twitter.com/tiktok_comms/status/1307454658680631296?s=20" rel="noopener noreferrer" target="_blank">statement</a>.</p><h3>What about ByteDance?
</h3><p>The buzzer beater announcement was short on details about the exact role that ByteDance will play going forward, but it appeared to fall short of President Trump's initial demands that ByteDance give up majority control of the company. During a Wednesday press conference, President Trump himself said that he was "not going to be happy" if ByteDance retained majority control of TikTok under the deal. But by Saturday, he seemed to have reversed course, saying the deal had his blessing. "You have the combination of the Walmart, that's obvious, and the high tech of Oracle, and the genius of the two leaders of those companies, OK?" Trump <a href="https://www.cnn.com/2020/09/19/tech/donald-trump-tiktok-deal-approval/index.html" rel="noopener noreferrer" target="_blank">said</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Trump also said he <a href="https://twitter.com/atrupar/status/1307460412770865153?s=20" rel="noopener noreferrer" target="_blank">asked Oracle</a> to create a $5 billion education fund to "educate people as to the real history of our country … not the fake history." Oracle, TikTok and the White House did not immediately respond to a request for comment about that fund. Neither company's statement mentioned it. </p><p>Though the president has reviewed the deal, Treasury Department spokesperson Monica Crowley said it's not yet finalized. "Approval of the transaction is subject to a closing with Oracle and Walmart and necessary documentation and conditions to be approved by [the Council on Foreign Investment in the U.S.]," Crowley said in a statement.</p><p>The president's original order centered on the security risks of allowing a Chinese-owned company to collect data on TikTok's 100 million users across the US. Unless the company was sold off, Trump's order said, TikTok would never really be free of Beijing's control. Now, some argue, it still won't. "An ongoing 'partnership' that allows for anything other than the full emancipation of the TikTok software from potential Chinese Communist Party control is completely unacceptable, and flatly inconsistent with the president's Executive Order of Aug. 6," Republican Sen. Josh Hawley of Missouri wrote in a letter to Treasury Secretary Steve Mnuchin last week.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Others went so far as to question whether the arrangement was, in fact, a sweetheart deal for Oracle, whose founder, Larry Ellison, is among President Trump's biggest fundraisers. "It's hard to imagine this is anything but a payoff from China to one of Donald Trump's major campaign fundraisers," Democratic Sen. Ron Wyden of Oregon said in a statement following initial reporting on the deal. "Making Oracle a middleman won't protect Americans against Chinese government influence, and to make matters worse, Oracle has an awful record of harvesting and selling Americans' private data to anyone with a credit card." </p><p>Ellison in a statement on Saturday said TikTok picked Oracle's Generation 2 cloud infrastructure "because it's much faster, more reliable and more secure than the first-generation technology currently offered by all the other major cloud providers." </p><p>Walmart has signaled its <a href="https://corporate.walmart.com/newsroom/2020/09/13/statement-of-walmart-inc-on-potential-tiktok-investment-in-the-united-states" rel="noopener noreferrer" target="_blank">interest</a> in TikTok for weeks, <a href="https://corporate.walmart.com/newsroom/2020/08/27/walmart-statement-regarding-discussions-with-microsoft-about-tiktok" rel="noopener noreferrer" target="_blank">noting</a> that having a stake in the platform could help with the retail giant's advertising ambitions. TikTok's interim head Vanessa Pappas has also said she sees "synergies" with Walmart. "For us, we've been really focused recently on rolling out some ecommerce features. We've been providing that for our creator community as another way for them to earn a livelihood," Pappas <a href="https://www.cnbc.com/2020/08/28/tiktok-interim-head-we-already-have-synergies-with-walmart-in-e-commerce.html" rel="noopener noreferrer" target="_blank">told</a> CNBC in late August.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><h3>More than meets the eye
</h3><p>There's likely more to the deal than the public will ever see. When reviewing a foreign investment, the Council on Foreign Investment in the U.S., or CFIUS, regularly works out what are known as mitigation agreements, which can include requiring companies to hire <a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-rfa-474779-cfius-monitoring-and-assessment-services-pov.pdf" rel="noopener noreferrer" target="_blank">third-party monitors</a> from firms like Deloitte or submit to regular audits. The specifics of those agreements rarely see the light of day, but if CFIUS approves a controversial deal, experts say you can bet it's put some oversight mechanism in place. "I think you could put your money on that," said one lawyer who has helped negotiate these deals in the past, but asked for anonymity because of the political nature of the TikTok arrangement. "Whether the mitigation is going to be satisfactory for national security, we will never know." </p><p>The precise nature of the government's national security concerns has never been clearly articulated. The executive order itself makes reference to TikTok's data collection practices and to reporting that suggests it has censored content to satisfy the Chinese government, but TikTok has <a href="https://newsroom.tiktok.com/en-us/tiktok-files-lawsuit" rel="noopener noreferrer" target="_blank">argued</a>, including in a recent lawsuit against the Trump administration, that those assertions are either speculative or outdated. </p><p>National security experts, however, have said that while the politicization of the process complicates matters, there are legitimate causes for concern when it comes to TikTok's China ties. "We need to separate politics from national security concerns and from any harm that can be done to consumers," said Ashkhen Kazaryan, director of civil liberties with TechFreedom. Kazaryan said she has long been uneasy about the amount of data TikTok collects and how it could end up in the hands of the Chinese government, and hopes CFIUS tackled those questions during its investigation. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><h3>All the baggage
</h3><p>The new partnership means that Oracle will be inheriting plenty of TikTok's baggage beyond its ties to China. TikTok's rise has been rapid: It's amassed 100 million monthly active users in the U.S. in less than two years. As a result, it's still struggling to catch up with its own colossal growth. TikTok is still developing the basic infrastructure to handle the challenges related to speech, safety, copyright law and other issues that all popular social media networks eventually have to face.</p><p>Last year, the Federal Trade Commission fined the app $5.7 million for violating children's online privacy laws. In May, a group of children's privacy advocates filed a new <a href="https://commercialfreechildhood.org/wp-content/uploads/2020/05/tik_tok_complaint.pdf" rel="noopener noreferrer" target="_blank">complaint</a> alleging TikTok is violating the terms of that 2019 settlement with the FTC and the Children's Online Privacy Protection Act. "It's not like that [2019] consent decree gets wiped off the books," said Josh Golin, the executive director of the Campaign for a Commercial Free Childhood, which led the latest complaint to the FTC. "They have a duty to stop processing the data of all people under 13." </p><p>And in July, following a tense, monthslong standoff, TikTok <a href="https://musically.com/2020/07/23/tiktok-licensing-us-publishing-nmpa/" rel="noopener noreferrer" target="_blank">announced a partnership</a> with the National Music Publishers Association, the trade group for thousands of music publishers and songwriters that had threatened to sue TikTok for copyright violations. "We expect our licensing deal to remain intact and available as TikTok must continue to pay the songwriters who make its product so popular," NMPA President and CEO David Israelite said in a statement to Protocol.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>There are still many unknowns around what Oracle's work with TikTok will look like and how the companies will resolve the regulatory fears about the app. What is known is that the president's very public involvement in the negotiation has been peculiar and, according to Eric Goldman co-director of the High Tech Law Institute at Santa Clara University School of Law, could provoke a retaliation from China. "The U.S. government has weighed in at every step along the way," Goldman said. "To devalue the assets, to raise barriers to completing the transaction and to signal to China that it's OK to do that to American companies as well."</p>
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Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
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