Morning Consult Tech: What's Ahead & Week in Review

Morning Consult Tech: What’s Ahead & Week in Review

Tech

Essential tech industry news & intel to start your day.

March 12, 2023

By AJ Dellinger

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Happy Sunday, Morning Consult Tech readers.

This past week, spurred in large part by the introduction of conversational search features in Microsoft Corp.’s Bing, we took a closer look at how consumers are thinking about generative artificial intelligence in chatbots and search engines. One thing we found: About 3 in 10 people are willing to switch to an AI-powered search.

For Microsoft, which currently holds something like 3% of the total search market, the prospect of tapping into that 30% willing to move is too tempting to pass up.

To that end, Microsoft celebrated a new milestone last week: 100 million daily active users for Bing. No doubt a good portion of that is driven by its conversational AI search — though maybe less than you’d assume. Per Microsoft, more than 1 million of its new users are part of its “preview” program, which includes Bing Chat.

A bigger driver of Bing’s success: an increasingly relentlessly enforced closed ecosystem. Microsoft has increasingly been locking Windows users into its Edge browser, where Bing is the default search. Switching default browsers in the operating system is a pain on purpose — there’s a pop-up urging you not to download competitor browsers — and Microsoft has made it so some links only open in Edge no matter what, blocking workarounds that try to address the restriction.

Not super surprising: If you want to use the new Bing chat, you have to do so in Edge.

We found that most users want a search engine that integrates into a familiar ecosystem — one that plays nice with their email, maps and other preferred services. Most people tend not to appreciate being forced into that ecosystem, though.

This is an oversimplification, but one of the things that spelled trouble for Apple Inc.’s Siri: It couldn’t automatically play songs from Spotify. At some point, Bing chat will have to play nice with other browsers if Microsoft really wants to make a dent in Google’s search dominance.

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What’s Ahead

Verizon Communications Inc. will host its 2023 State of Telecom Policy event in Washington, D.C., on Wednesday, with a focus on a variety of industry-specific topics including the Affordable Connectivity Program, the Broadband Equity, Access and Deployment (BEAD) Program and privacy. Speakers include Alan Davidson, administrator of the National Telecommunications and Information Administration; former Commissioner Mike O’Rielly (R) of the Federal Communications Commission; and Kathy Grillo, Verizon’s senior vice president of public policy and government affairs.

Both the FCC and the Federal Trade Commission will hold their monthly open commission meetings on Thursday.

At the FCC, the open meeting will see the agency consider a new rule that would allow terrestrial internet providers to collaborate with satellite operators to expand coverage area, consider how to ensure reasonable rates and charges for incarcerated people’s audio and video communications services and take up two orders to improve consumer protection against robocalls and robotexts.

The FTC’s open meeting will include a vote on whether to issue demands for information to eight social media and streaming companies over how they handle deceptive advertising practices, as well as a separate vote on whether to issue demands for information to five business credit reporting agencies concerning how they collect information and market their products.

Microsoft will hold an event titled “The Future of Work: Reinventing Productivity with AI” on Thursday that will feature demonstrations of how the company will integrate ChatGPT-style generative AI into its Office apps including Teams, Word and Outlook. Microsoft Chief Executive Satya Nadella and Microsoft 365 head Jared Spataro will lead the event.

Think tank New America, in partnership with Future Tense and Arizona State University’s Convergence Lab, will host an event titled “North America’s Semiconductor Moment” on Wednesday that will focus on opportunities for strengthening the semiconductor supply chains across the United States and Mexico. Speakers include Rina Pal-Goetzen, director of global policy at the Semiconductor Industry Association; and Gerardo Lameda, head of cooperation affairs and education at the Embassy of Mexico in the United States.

The Wall Street Journal will hold a CIO Network Summit on Tuesday, with a focus on improving efficiency across enterprise networks while cutting costs. Speakers include Oracle Corp. Chief Information Officer Jae Evans; Andreessen Horowitz general partner Martin Casado; and Cloudflare Inc. CEO Matthew Prince.

Week in Review

TikTok

Sens. Mark Warner (D-Va.) and John Thune (R-S.D.) introduced the bipartisan RESTRICT Act, which would task federal agencies with reviewing potential national security threats posed by hardware, software, mobile apps and other technology originating from countries deemed adversarial including China. The bill, which would grant the White House and Commerce Department the ability to issue sanctions or ban an app like Chinese-owned TikTok, received an endorsement from White House security adviser Jake Sullivan, who is urging Congress to quickly pass the legislation.
FBI Director Chris Wray told the Senate Intelligence Committee that the Chinese government has the ability to control software on millions of devices and could control the data of millions of users because of its relationship with TikTok parent company ByteDance Ltd. Wray also warned that the Chinese government could drive narratives on TikTok by controlling what content is shared with users with little to no “outward signs of it happening.”
Attorneys general from 45 states demanded TikTok produce subpoenaed materials including internal communications as part of an ongoing investigation into whether the video sharing app harmed the mental health of its users, particularly children and teens. The states have urged a Tennessee state court, where the investigation was initially filed last year, to compel TikTok to respond to requests for information.

Cybersecurity

President Joe Biden’s proposed $6.9 trillion budget for the 2024 fiscal year includes significant spending on cybersecurity improvements, allocating $3.1 billion to the Cybersecurity and Infrastructure Security Agency, which includes $98 million to implement the Cyber Incident Reporting for Critical Infrastructure Act and $425 million to improve the federal government’s cybersecurity and analytical capabilities. Additional funding includes $200 million for the Technology Modernization Fund to improve IT infrastructure and $245 million to fund the cybersecurity and resilience of clean energy technologies.
The FBI and Defense Department were actively involved in researching and developing facial recognition software that could identify people from video captured by street cameras, drones and other surveillance cameras, according to a slew of internal documents provided in response to an ongoing Freedom of Information Act lawsuit that the American Civil Liberties Union filed against the FBI. The documents show that program leaders worked with FBI scientists and computer-vision experts to improve facial recognition systems with the goal of quickly and accurately identifying people captured on surveillance cameras in public places without their awareness or consent.
A “significant data breach” at DC Health Link, the online marketplace that offers health care plans for members of Congress and Capitol Hill staff, has potentially exposed personal identifiable information of hundreds of lawmakers and staff, according to a letter from House Chief Administrative Officer Catherine L. Szpindor. Information exposed in the breach included “full names, date of enrollment, relationship (self, spouse, child), and email address, but no other Personally Identifiable Information (PII),” and it is believed that lawmakers were not specifically targeted in the attack.

Meta Platforms Inc.

Meta is expected to undergo another round of layoffs that is expected to cut thousands of employees, according to people familiar with the matter. The rumored downsizing comes after Facebook and Instagram’s parent company let go of 11,000 workers in November 2022 — the company’s first-ever major layoff.
Meta’s head of WhatsApp, Will Cathcart, told legislators in the United Kingdom that the popular chat app would not comply with any requirement that would remove end-to-end encryption, indicating a potential pullout of the United Kingdom entirely to avoid such a mandate. An online safety bill currently being considered in the United Kingdom would effectively require WhatsApp to remove encryption in order to enforce content moderation rules, with a fine of up to 4% of Meta’s annual turnover for failing to comply.

Antitrust

Sony Group Corp. has asked the United Kingdom’s Competition and Markets Authority to either block Microsoft’s proposed $69 billion acquisition of Activision Blizzard Inc. or force the companies to sell the popular Call of Duty franchise as part of the deal, citing its belief that no other solution is available to prevent harm to game consumers, according to responses to the potential remedies published on Wednesday. Microsoft has claimed the purchase can’t be completed without the inclusion of Call of Duty and has sought out licensing deals for the game with competitors like Nintendo Co. and Nvidia Corp. to appease regulators.
Senate Majority Leader Chuck Schumer (D-N.Y.) hired Evan Turnage, former senior counsel for Sen. Elizabeth Warren (D-Mass.), to serve as his new chief counsel. Turnage specializes in antitrust and competition and may signal a new push from the Senate to pursue antitrust reforms aimed at Big Tech companies.

Other news

Silicon Valley Bank collapsed Friday, requiring the Federal Deposit Insurance Corporation to take control and create a new bank, the National Bank of Santa Clara, to hold the nearly $175 billion in customer deposits, which includes money from major technology firms. The FDIC said the new bank will be operational Monday and checks issued by Silicon Valley Bank would continue to clear, and customers with deposits totaling more than $250,000 received certificates for uninsured funds that will potentially allow them to be partially paid back.
Gigi Sohn, the co-founder of technology policy organization Public Knowledge, withdrew her nomination to serve as a commissioner on the FCC, leaving the agency with an empty chair and a 2-2 deadlock among Democratic and Republican officials. Sohn was first nominated in October 2021 and went through three Senate confirmation hearings in 16 months before ultimately withdrawing due to personal attacks from lobbyists and industry interest groups.
The FTC has demanded documentation from Twitter Inc. including internal communications related to owner Elon Musk, detailed information about the company’s widespread layoffs and information about journalists granted access to internal company records as part of the Twitter Files, according to documents viewed by The Wall Street Journal. Excerpts from the requests, obtained and published by the Republican-led House Judiciary Committee, stem from an FTC investigation into whether decisions made by new ownership could compromise the company’s ability to protect users.
The Biden administration imposed new sanctions against five Chinese companies and one individual who were allegedly responsible for supplying parts that could be used to manufacture drones to Iran, which was in turn providing the technology to Russia to use in its invasion of Ukraine. Iran has denied accusations that it has provided weapons to Russia, but a declassified U.S. intelligence report released earlier this year showed Iranian-made drones deployed by Russia in Ukraine.

Stat of the Week

3.18 million

The number of people who may have had sensitive medical information and other personal information exposed by a data breach that hit online mental health and therapy app Cerebral.