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Day: January 19, 2021

Twitter Ban shows that the free market works

Big tech’s conservative purge will lead to stricter regulations.

Earlier this month, Twitter banned the personal account of Donald J. Trump (@realdonaldtrump) and at the same time limited the official White House account, leaving the President of the United States unable to directly communicate with the nation and its voters on the platform. 

For many conservatives, the move to ban Trump from Twitter after the Capitol riots on January 7, was an assault on freedom of speech and since then, many leaders around the world have also condemned how Twitter handled the situation. 

German Chancellor Angela Merkel was critical of Twitter for blocking President Donald Trump’s account, considering the ban a threat to free speech. The European commissioner Thierry Breton saw Twitter’s decision as a total break from the past, calling it “the 9/11 moment of social media” in an op-ed published by Politico. Acting Australian Prime Minister Michael McCormack said blocking Trump amounts to censorship. And the French Junior Minister for European Union Affairs Clement Beaune said to Bloomberg that “This should be decided by citizens, not by a CEO.”

Other social media platforms such as Facebook, Instagram, Snapchat, TikTok, and YouTube followed Twitter’s lead and now Trump is banned from virtually every major platform out there, mostly indefinitely. Those who approve of Twitter’s ban of Donald Trump and the purge of thousands of conservative accounts on the platform, like to invoke the mantra that if conservatives think they have been “shut down”, they should also find comfort in the fact that the free market will provide an alternative and competition. However, it’s not that simple.

Social media platforms enjoy a great privilege that not many other companies or sectors do. They make their own rules under their Terms of Service and have total control of their platforms. This extreme power makes it hard for users and companies who feel that they have been unfairly treated to have a diligent due process review of their claims. With nowhere to go to have their voices heard, one last line of defence still stands and stronger than ever: the market.

After the ban of Donald Trump’s accounts, which had over 80 million followers on Twitter, some consumers started to ditch the social media platforms and services that they believe were censoring and targeting conservative speech. Many well known political accounts, such as James Woods reportedly lost over 7 thousand followers in 48 hours and the Heritage Foundation, a conservative think tank, lost 45,000 followers. Even more centrist political accounts as Dave Rubin reported a drop of over 35 thousand followers on Twitter. Republican lawmakers also lost thousands of followers. According to USA Today, about 42% of the accounts – 213 – had fewer followers on Jan. 13 than they did on Jan. 6. The vast majority of those accounts –200 – belonged to Republicans. As a result, the next week, Twitter stocks plummeted more than 10%. Facebook fell 4% to $256.84, Alphabet stock was down 2.2% to $1,766.72, and Amazon stock dropped 2.2%, to $3,114.21.

The market reacted this way because large tech companies are alienating users by directly excluding accounts and because people are simply leaving the platforms all together for alternatives such as Gab and Rumble. Parler was a popular alternative for Twitter but was wiped off the internet last week after both Apple and Google remove the app from their stores and Amazon decided not to host the website on their AWS servers. 

Most of today’s social media platforms are free because they collect data about their users every day, from location to website searches, even fingerprinting all your devices. Those pieces of information are sold to advertisers who cater to your interests.  As we have written, this practice is both innovative and helps support the social media networks we use. However, the business model is not sustainable if tech companies are not able to gather updated information about their users, or worse, if the consumers the advertisers are looking to reach are not on their platforms anymore. 

Twitter CEO Jack Dorsey, whose company’s share plumed the most this week, seems to have realized this the hard way. His strategy may have backlashed as now, millions of conservative consumers are out on the internet, without a home, and desperately looking for a new place to be heard and speak freely. He acknowledged last week that banning Trump from Twitter “sets a precedent I feel is dangerous: the power an individual or corporation has over a part of the global public conversation.”

Tech companies should be aware that even though they enjoy a privileged position now, this might not last for long. The European Commission, for example, has introduced two proposals that would place more restraints on digital giants. The first, is the Digital Markets Act, the centerpiece of Europe’s digital plans aimed at boosting online competition in a world dominated by Silicon Valley. The second is the Digital Services Act aimed to limit the spread of illegal content and goods online, making online platforms responsible for the spread of such content. Other countries might also try to regulate digital services in a way that would be prejudicial to tech companies and most importantly, to consumer choice. Poland, for instance, plans to make censoring of social media accounts illegal: “algorithms or the owners of corporate giants should not decide which views are right and which are not,” wrote the prime minister, Mateusz Morawiecki on Facebook last week.

For now, a free market is still the most powerful way in which consumers can have a voice and make their choices clear. This might change in the future, but it’s comforting to know that even when governments fail, consumers and private companies can count on the power of supply and demand. And if you ask me, I wouldn’t change it for anything else.

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Originally published here.

Germany’s energy transition should give us pause

A radical energy transition should not punish consumers.

If we want to be serious about climate challenges and the growing energy demand, we must urgently take up the issue of nuclear energy again.

Imagine that you declare an energy transition, but nobody is participating in it. This is what happened in Germany with the “Energiewende” (energy transition). This German transition led to a significant price increase for ordinary people. The Institute for Economic Research found that this radical change cost German households more than 28 billion euros because the market was subject to less competition. The big winners from this transition are the coal and gas industry.

Indeed, the use of coal- and gas-fired power stations has increased so much that Germany – even with all the efforts to reduce carbon dioxide emissions – has remained stagnant on its results. As a result, its climate targets have not been met. To avoid Germany’s situation, the Greens in Finland are in favour of nuclear power. In Switzerland, even though the country no longer builds new power plants, it has several times rejected the principle of a complete phase-out of nuclear power by means of a referendum.

The need for nuclear power is also becoming more and more important for reasons of national security: why accept a growing dependence on gas from Russia, a country that violates human rights and is regularly hostile to European countries?

The scientific world, which the political world wants to rely on when it comes to underlining the urgency of climate change, has regularly made its voice heard in this debate. In December 2014, 75 scientists from around the world wrote an open letter to environmentalists on nuclear energy, claiming that it is an efficient and necessary means of producing energy and that the facts contradict the ideological reasoning against power plants.

The scientists were brought together by Professor Barry W. Brook, chair of sustainable environment at the University of Tasmania, Australia. This environmentalist has published three books and more than 300 scientific articles. Their letter said:

“Although renewable energy sources such as wind and solar are likely to make an increasing contribution to future energy production, these technological options face practical problems of scalability, cost, materials and land use, which means that it is too risky to consider them as the only alternatives to fossil fuels”.

Nuclear energy is the answer to the problems of our time. It is affordable and, importantly, does not emit CO2 emissions. The United States, not particularly known for its adherence to international climate agreements, has avoided 476.2 tonnes of CO2 emissions thanks to nuclear power. Since 1995, a total of 15.7 billion tonnes has been avoided thanks to nuclear power or a third of the planet’s annual consumption. Of course, this is a figure that would have to be increased, but this will only be possible with energy models such as France’s, which guarantees energy independence with a system of extensive nuclear power plants.

Furthermore, we must come back to the facts when it comes to the discussion on waste. In reality, nuclear fuel is extremely dense. It is about a million times larger than that of other traditional energy sources and, as a result, the amount of nuclear fuel used is small. All the nuclear fuel waste produced by the US nuclear industry over the last 60 years could fit on a football field less than 10 metres deep. Moreover, currently, 96% of this “waste” is recyclable.

Opposition to nuclear power is mainly due to a lack of knowledge of the technological systems, as well as the problematic media coverage of accidents such as the one in Fukushima. As the ecologist Michael Schellenberger notes, “the number of deaths for the same production of electricity, here, for example, the terawatt-hour, is significantly lower than for other major means of mass production such as coal, oil, biomass and natural gas”.

While we are all concerned about the effects of climate change, we must realise that nuclear power is the only viable alternative that is safe, clean and capable of guaranteeing the production we need. Should we have a debate on nuclear power? Of course, we do. But we must ensure that this debate is based on facts and without losing sight of the objective of maintaining our quality of life while reducing greenhouse gases.

Originally published here.

AFRICA: a charter on agroecology is born

The International Agroecological Movement For Africa, (I am Africa) aims to revolutionise African agriculture on a sustainable and environmentally friendly basis. This desire, which was started on the fringes of the “One Planet Summit 2021”, is governed by a charter that is open for signature by other companies willing to invest in future-oriented agro-ecological sectors in Africa.

This is the agricultural version of the third edition of the “One Planet Summit”. On the side-lines of this international summit on climate change, held on January11th, 2021 by videoconference, more than 100 African and European operators from across the agricultural value chain launched the International Agroecological Movement For Africa, (Iam Africa). The initiative is governed by a charter in which the signatories commit themselves to investing in agro-ecology in Africa. “The objective of the signatories is to participate in the promotion of a strategy that combines social, environmental and economic development for the prosperitý but also for the preservation of the biodiversitý and more generally of the continent’s stabilitý,” says Karim Ait Talb, co-founder of the initiative and deputy managing director of the Advens/Geocoton group.

The provisions of the charter give a large part of the project implementation to local companies and organisations. And the collaboration between the latter and European structures should encourage technology transfers and the appropriation of the know-how necessary for the sustainable establishment of the agricultural and livestock production sectors envisaged by this charter.

The Sahel region will be a priority

Iam Africa intends to deploy particularly in the Sahel region, considered to be one of the epicentres of global warming in the world. The signatories of the charter are indeed convinced that the establishment of an agro-livestock value chain encouraging the deployment of agro-ecological practices, and the creation of dignified and sustainable jobs, will constitute an important response for the adaptation of the populations of the region and the mitigation of the effects of climate change, particularly with regard to migration flows and security challenges. The intensification in the Sahel of projects carried out in the framework of Iam Africa should also contribute to the realisation of the Great Green Wall initiative by 2030.

However, it would be prudent for Iam Africa members to adapt the vision of their charter to local realities. For some experts warn against the popularisation of agro-ecology in developing countries. Its lack of mechanisation, GMOs and the use of synthetic fertilisers is a blow to agricultural production. A recent study by pro-agroecology activists showed that applying these principles to Europe would reduce agricultural productivity by an average of 35%. For Bill Wirtz, a public policy analyst for the Consumer Choice Center, if such a scenario were to occur in Africa, it would be a disaster for a continent where 20 per cent of the population suffers from hunger (2017), according to a UN report.

Originally published here.

Facebook Breakup will harm consumers

Breaking up and regulating tech companies will harm consumers, not serve them.

The recent uptick in downloads of privacy-focused messaging apps such as Signal and Telegram is a great testament to the power of consumer choice in the digital sphere. It should deal a heavy blow to the attempts of breaking up or regulating WhatsApp’s parent company Facebook as the market is quite evidently not dominated by one monopoly. Moreover, intrusion into private companies will ultimately result in stifling consumer choice, and thus, should be abstained from.

Today’s consumers and developers have far greater power than ever before. No company is spared from the continuous battle over users as switching to a competitor in the tech world takes a few clicks and an app store. A great number of tools and services are at constant disposal for anyone, who is looking for a better solution to his individual problem.

Given these market dynamics, app creators are incentivised to create solutions for every niche problem to satisfy their target user group, compete in a global market, and scale their solution worldwide. Some apps may access your data to provide a better service by analysing usage patterns. Others may protect your privacy but compromise on another feature. The ability to choose between these options (or to use both for different use cases!) constitutes a consumer choice paradise rather than a monopoly worth regulating.

Furthermore, interfering in markets by breaking up companies or regulating them seldom comes at no cost. Any infringement harms innovation and reduces investment.

Facebook, for instance, purchased Instagram and WhatsApp for $1 billion and $19 billion, respectively. Although both had an existing user base, neither was generating large sums of revenue before being taken over. There is simply no telling if without investments in innovation from their new parent company, those services would have generated any long term profits and delivered the services to their users that they love today.

Retroactively, turning back the clock would set a dangerous precedent for any company that wants to invest in creating superior experiences for their user-base and show that no investment is safe from regulators. The price for innovating to enrich all of our lives would be an uncertain return on investment. The ultimate victim of over-regulating a naturally liberal market: consumers.

Fears of harming innovation as a consequence of overzealous regulators are not purely theoretical. The effort to split Microsoft’s software and operating system from another in the early 2000s did little to liberate markets. Rather, it inhibited the company that developed the most popular operating system from innovating by dragging them into the courtroom for pre-installing the Internet Explorer on Windows machines.

In the end, no regulators were necessary to decide on behalf of consumers. As more browsers naturally emerged, consumers replaced Internet Explorer as the most popular browser regardless of it being delivered out of the box. However, there is no telling how much damage has been done to Microsoft and users alike by the regulatory efforts to destroy a company simply because of its success.

Today’s efforts even go beyond break up fantasies. Another favoured approach by lawmakers across the globe is imposing interoperability, ordering messaging services to communicate with each other to lower barriers of entry. On first sight, the idea makes sense: let users choose their preferred service and allow them to communicate with anyone regardless of their preferred option. Unfortunately however, interoperability will also only harm consumers.

Interoperability necessitates common standards. Emails for example are interoperable as you can communicate with anyone regardless of their provider. The standard may have been the gold standard a few decades ago. But by today’s standards emails are not secure, they are not user friendly, and there have been no significant improvements to the protocols for decades. Similarly, text messages are interoperable, which is hardly a plus as they are simply inferior to messaging apps. 

Absent any regulation, developers can tailor these apps to their users, introduce new features, and innovate to win users. This liberty to innovate is why freely available apps provide the safest way to communicate that has ever existed by superior encryption standards. It also allowed millions of users to switch to an alternative app last week, seeking conditions that are not standardised by law and more applicable to them.

Any governmental effort to define these encryption standards, as would be necessary to allow for interoperability, would also make it easier to break these privacy seals that consumers desperately desire.  Lawmakers need to understand that their actions are not providing value to consumers. Neither breaking up so-called monopolies nor imposing arbitrary regulations is in the interest of their people. Consumers are more than capable of making their own choices. Millions of them have done so in the past week as they did not agree with a new policy imposed on them by WhatsApp.

Kya Shoar is a Digital and Tech Fellow at the Consumer Choice Center.

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