Year: 2019

Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools to help larger enterprises to sell to consumers online has raised a large growth round to meet that demand. Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has raised $145 million (€130 million) in a growth round of funding led by Insight Partners, at a valuation that we understand from a close source is around $300 million.

The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and tourist services giant that acquired the startup in 2015 for an undisclosed amount.

The route the company took after that is a not-totally-uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 60-70% annually, CEO and co-founder Dirk Hoerig said in an interview.

Current companies include Audi, Bang & Olufsen, Carhartt, Yamaha and some very big names in retail products and services (including major telco/media brands in the USA that you will definitely know). Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to supercharge that growth. REWE will remain a significant shareholder with this deal.

Hoerig said that commercetools had raised only around $30 million in outside funding when it was a startup ahead of getting acquired.

Although e-commerce has grown over the last couple of years with slightly less momentum than in previous years given wider economic uncertainty, it continues to expand, and in that growth, we’ve seen a swing back to individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon) that have come to dominate how people spending money online.

That is giving a boost to those providing essentially non-tech businesses the tools to build e-commerce activity by offering “headless” tools that are attached to front-end systems designed by others.

Shopify, which focuses more on providing e-commerce tools by way of APIs to medium and smaller customers, has ballooned to some 800,000 customers. Commercetools focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig said.

Commercetools has no plans to expand to smaller companies — “We have no plan to compete against Shopify,” Hoerig said. Nor is there any strategy in place to extend into logistics, another important component of e-commerce services.

Instead, it wants to use the funding to continue expanding its business in North America and other parts of the world, as well as to continue building up its B2B2B offering — that is, tools for businesses to sell to other businesses. This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.

Another area where it will continue to figure where it can play better is in the development of better online-to-offline technology.

Richard Wells and Matt Gatto of Insight are both joining the board with this deal.

“With a strong track record of investing in retail software leaders, we are excited to have the opportunity to invest in commercetools and help them scale up internationally,” said Wells in a statement. “In our opinion commercetools represents the next wave of enterprise commerce software and has the potential to unlock powerful innovation and growth within the e-commerce sector.”

Nadiem Makarim, founder and CEO of Gojek, said on Monday he has stepped down from his role at the ride-hailing startup to join Indonesia president Joko Widodo’s cabinet.

The announcement, which has taken many by surprise, comes a day after Widodo was sworn in for a second term. Widodo has previously said that he wants young business executives to join his cabinet.

In a statement, a Gojek spokesperson told TechCrunch that Andre Soelistyo, Gojek Group President and Kevin Aluwi, Gojek co-founder, are taking over as co-CEOs of the startup.

“We are very proud that our founder will play such a significant role in moving Indonesia onto the global stage. It is unprecedented for a passionate local founder’s vision to be recognised as a model that can be up-scaled to help the development of an entire country,” the spokesperson said.

“We have planned for this possibility and there will be no disruption to our business. We will make an announcement on what this news means for Gojek within the next few days. We respect the process set out by the President and will not make a further comment until there is an official announcement from the Palace,” the spokesperson added.

Makarim said he was honored that the president asked him to join his cabinet as a minister. He did not reveal which position he would hold, but an announcement from Widodo is expected later this week. “I am very happy to be here today as it shows we are ready for innovation and to move forward,” he told reporters.

Makarim founded Gojek in 2010 as a two-wheeler hailing service. The startup has since expanded to include a range of services including mobile payments, food delivery, online shopping and most recently on-demand video streaming.

The startup has amassed more than 2 million driver partners and 400,000 merchants on its platform. Gojek was valued at almost $10 billion in its most recent financing round. The company, which operates in Singapore, Vietnam, and Thailand, clocked gross transaction worth $9 billion last year.

Makarim comes from a prominent Indonesian family: His parents are anti-corruption activist, while his grandfather is an independence hero.

Facebook is willing to reverse course on its plans to tie its digital currency project to a synthetic currency tied to a basket of global currencies.

Reuters is reporting that Facebook’s head of the Libra project, David Marcus, told a group of bankers that the company’s main goal was to create a better payments system and was open to alternative approaches to the original structure of the project.

Facebook and its partners had intended to create its cryptocurrency by pegging it to a basket of national currencies whose holdings would be set by the Libra Association.

National banks considered the plan part of a dangerous end-run around their regulatory authority and have been holding up the project until they could assume tighter control over how the Facebook-architected cryptocurrency and payment technology would operate.

The scrutiny from regulators proved too much for some of Facebook’s largest, and earliest, partners in the Libra Association, whose members would determine how the cryptocurrency would operate.

In the past month seven of the Libra Association’s founding members dropped out including: PayPal, Mastercard, Visa, Ebay, and Stripe. Those seven represented a big chunk of the strategic value and commercial heft of the planned association, with Stripe, Mastercard, Visa, and Ebay standing in for a huge number of payment processors and merchant touchpoints that the new cryptocurrency would need were it to dramatically scale to the size Facebook wanted right out of the gate.

Now, in another strategic reversal, Marcus is conceding the synthetic currency in favor of stablecoins tied to the local currency in each market that Libra would operate.

“We could do it differently,” Reuters quoted the Libra Association chief as saying. “Instead of having a synthetic unit … we could have a series of stablecoins, a dollar stablecoin, a euro stablecoin, a sterling pound stable coin, etc.”

All of this is happening against the backdrop of Facebook’s stated launch date of June 2020 for the Libra cryptocurrency. Marcus told Reuters that the June launch was still the goal, but that the association would not move forward unless it had addressed the concerns of regulators and received the proper approvals.

Those approvals are becoming harder to come by as the regulators who overseen global monetary policy cast a more skeptical eye at on stablecoins as well.

Reuters reported that the G-20 financial overseers wrote in a statement that money laundering, illicit finance and consumer protection need to be evaluated before any stablecoin projects can “commence operation.”

Years ago, I wrote a piece criticizing a cover story by a well-known writer and political commentator that I’d met a few times, with whom I’d occasionally sparred on Twitter. The piece wasn’t merely a representation of my own views, but pulled in snarky tweets from other journalists disparaging her work too. It was a pile-on, and not my proudest moment.

The Writer wasn’t exactly thin-skinned; in fact, quite the contrary: She was a brash, sometimes obnoxious feminist with strong opinions, unafraid to speak her mind. I often agreed with her, even when I found her delivery abrasive. Still, after a couple of years with me as a thorn in her side, she decided she’d had enough—and so she did something that many readers will find familiar: She blocked me on Twitter.

The block button is an important tool that allows women and other vulnerable people to have some semblance of the same Twitter experience that the average white man might, free from constant harassment. I couldn’t tell you how many times I’ve used it over the years to drown out nasty ad hominems, sea lions, and of course, sexual harassment and worse. 

Twitter wasn’t always the “hell site” we know it as today. Many early users like me found professional advancement and lasting friendship in 140-character missives. But as the site grew, so did its potential for misuse. By 2014—two years shy of its tenth anniversary—Twitter had become central to the GamerGate controversy, ostensibly a dispute about issues of sexism and progressivism in gaming but on Twitter, a free-for-all of harassment and doxing of any woman even tangentially involved in the discussion. The harassment was so severe that it drove some women off the site permanently.

Out of GamerGate emerged better tools for blocking, tools like BlockTogether that allow individual users to share a list of people they’ve blocked. The idea behind these tools is that harassers are likely to have multiple targets, so why not make it easier for potential targets of harassment to block numerous would-be harassers all at once?

But BlockTogether and similar tools are not without flaws. Once you’re on a blocklist, it can be hard to get your name removed and if you end up, for whatever reason, on one created by a prominent or well-respected user, you may find yourself blocked by people you don’t know and would’ve enjoyed following. Some might call this reasonable collateral damage.

Numerous journalists and others have complained of finding themselves on a blocklist after a disagreement with an individual who uses them. I’m unfortunately on one used by a number of journalists. Why, you might ask, was I blocked in the first place? I remember quite clearly: It was for disagreeing with someone about the life sentence handed to Ross Ulbricht, the creator of the Silk Road website. For my opinion, I’ve lost the ability to follow or interact with dozens of journalists whose work I read.

Despite that, I don’t blame women or other minorities who’ve experienced harassment for using the block button liberally. Blocking someone isn’t a matter of free speech (unless of course the blocker in question is an elected official), as some of my harassers have claimed—rather, it’s often a matter of preserving one’s sanity. The block button, along with blocklists, are useful tools for curating space—not a safe space per se, but one free from random harassers, spammers, and the like. Think of it more as a large invite-only event, as opposed to a New York City street.

And yet, I can’t help but wonder if our liberal use of the block button prevents us from experiencing the kind of reconciliation that can happen in our offline communities. We often remove someone from our life, only for them to apologize their way back in later on. Even the Amish, who practice shunning as a matter of faith, allow for the repented to return.

Twitter’s architecture has changed over time, sometimes for better and sometimes for worse. Presently, its algorithm sometimes surfaces replies from people you do follow, to tweets from individuals you don’t, based on some assumption that you mind find them interesting. Occasionally, it will surface a reply from a friend to someone with a locked account or, in rare cases, to someone who blocks you, as it did for me the other day. Someone I follow had replied with an interesting comment to a tweet from The Writer—a tweet that, of course, I couldn’t see without logging out and going directly to her profile. And so I did.

What I found was someone who, with that same fierce energy, seemed a lot more thoughtful, with views more similar to mine than I remembered. I felt a momentary pang of sadness for the camaraderie that might have been. I realized the obvious: That we’ve both grown, alongside the backdrop of the horrific political environment that’s accompanied us through the past half-decade. “Have you thought about reaching out to her?” a friend asked.

Therein lies the rub: In the case of The Writer, I could reach out to her; we’ve met in person a few times, and we retain mutual friends. She might respond favorably, or with a “thanks but no thanks”, but either way, it’s unlikely she would deem my approach to be harassment. But there’s this other journalist I’ve never interacted with, who no doubt signed up to a blocklist that I happened to be on. I discovered that she blocked me when I went to read a tweet someone had DM’d me, and was disappointed—but reaching out to her through some other channel would seem weird, invasive. It isn’t worth it.

I recently reviewed my own list of blocked accounts (you can do so through your settings), a list that numbers well into the hundreds. Most aren’t worth revisiting—there’s sexual harassers and transphobes, Bahraini bots and Roseanne Barr, some Trumpites and a few high-profile right-wing accounts. But among them, close to the bottom of the list (coinciding with the early days of the block button), I spotted a few outliers, and decided to give them a second chance.

Technology is constantly changing and progressing and yet, the block button—and blocklists—remain in rudimentary form. They’re simply not priorities for companies whose focus is on profit. But were we to redesign them, perhaps we could find a way to make blocks time-limited, or at least provide users with more nuanced options. One such existing feature is Facebook’s “snooze” button, which allows users to “mute” another person for 30 days, with a reminder when that time period is up; I found that one particularly handy last summer while a friend was going heavy on self-promotion. I use Twitter’s “mute” function to rid my feed of people with whom I have to interact professionally and thus can’t block. And then there’s the “soft block”—a feature or bug, it isn’t clear—wherein one can block and unblock someone quickly on Twitter so that the user no longer follows them…at least until they wisen up (this feature/bug is made easier by the fact that Twitter seems to be perpetually plagued by an “unfollow bug”). These tools are helpful, but with all the riches these companies have, they could design something—with input from those most affected by harassment—that is less blunt, more elegant, more thoughtful.

Ultimately, the block button is an imperfect solution to a pervasive problem, and therefore remains as necessary as ever. I know that I’ll continue to use it as long as I’m on social media. But…don’t we deserve something better?

When a TV show gets turned into a movie, it often represents a big change of pace, with a standalone plot, a bigger budget, all made for a bigger (or at least more casual) audience.

“El Camino: A Breaking Bad Story” — which premiered a week ago on Netflix —doesn’t take that approach at all.

Far from telling a new story or serving as jumping on-point for new viewers, “El Camino” functions more like a two-hour epilogue to the existing show. It appears to have been made exclusively for existing “Breaking Bad” fans who were wondering about what happened to Aaron Paul’s character Jessie Pinkman after the series finale.

As we acknowledge in the latest episode of the Original Content podcast, Jordan is the only regular OC host who’s actually seen the entirety of “Breaking Bad.” And she was reasonably satisfied with the film, feeling that it had some of the same strengths as “Breaking Bad” — though it didn’t quite capture the strong character development and elaborate plotting that made the series great.

Darrell, meanwhile, gets a chance to explain why he’s so resistant to “Breaking Bad,” and why nothing in “El Camino” changed his mind.

In addition to our review, we discuss Netflix’s latest earnings, in which which the streamer reported better-than-expected profits, despite still-sluggish subscriber growth in the United States.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

And if you want to skip ahead, here’s how the episode breaks down:

0:00 Intro
2:12 Netflix Q3 earnings
16:06 “El Camino” reviews (spoilers for “Breaking Bad” but not “El Camino”)
38:20 “El Camino” spoiler discussion

As it looks to modernize its operations, the Los Angeles Fire Department is turning to a number of new technologies including expanding its fleet of drones for a slew of new deployments.

One of the largest fire departments in the U.S. next to New York and Chicago, the LAFD has a budget of roughly $691 million, employs over 3,500, and responded to 492,717 calls in 2018.

The department already has a fleet of 11 drones to compliment its fleet of 258 fire engines, ambulances, and helicopters.

However, Battalion Chief Richard Fields,  the head of the department’s Unmanned Aerial Systems program would like to see that number increase significantly.

Los Angeles has become an early leader in the use of drones for its firefighting applications thanks in part to an agreement with the Chinese company, DJI, which the department inked back in April.

At the time, the Chinese drone manufacturer and imaging technology developer announced an agreement to test and deploy DJI drones as an emergency response preparedness tool. The company called it one DJI’s largest partnerships with a fire-fighting agency in the U.S.

“We are excited to be strengthening our partnership with the LAFD, one of the nation’s preeminent public safety agencies, to help them take advantage of DJI’s drone technology that has been purpose-built for the public safety sector,” said Bill Chen, Enterprise Partnerships Manager at DJI, in a statement at the time. “Through our two-way collaboration, DJI will receive valuable insight into the complexities of deploying drones for emergency situations in one of the most complex urban environments in the nation.”

Now, roughly five months later, the program seems to have been successful enough that Battalion Chief Fields is looking to double the fleet.

“Our next iteration is to start using our drones to assist our specialized resources,” said Fields. Those are firefighters and support crews that deal with hazardous materials, urban search and rescue, marine environments and swift water rescues, Fields said.

The LAFD Swift Water Rescue Team. Photo courtesy of Flickr/ LAFD Mike Horst

The technology demands of the fire department extend beyond the drone itself, Fields said. “There are a lot of technologies that allows us to make the drone more versatile… the most valuable tool isn’t the drone; it’s the sensor.”

So far, the most useful application has been using infrared technologies to balance what’s visible and combine it with the heat signatures the sensors pick up.

Training to become a drone pilot for the LAFD is particularly intense, Fields says. The typical pilot will get up to eighty hours of training. “Our training is nation-leading.  There’s nothing out there in the commercial market that beats it,” according to Fields.

For now,  the entire LAFD fleet is composed of DJI drones, something which has given military and civilian officials pause in the past few years.

Concerns have been growing over the reliance on Chinese technology in core American infrastructure extending from networking technology companies like Huawei, to drone technology developers like DJI.

Back in 2018 the Department of Defense issued a ban on the acquisition and use of commercial drones, citing cybersecurity vulnerabilities. The ban came a year after officials from the Department of Homeland Security and members of Congress called out DJI specifically for its potential to be used by the Chinese government to spy on the United States.

However, the rule isn’t set in stone and many branches of the military continue to use DJI drones, according to a September Voice of America News report.

In Los Angeles, Fields says he takes those concerns seriously. The department has worked closely with regulators and advocacy groups like the American Civil Liberties Union to craft a strict policy around what gets done with the data that the LAFD collects.

“The way that we establish our program is that the drone provides us with our real-time situational awareness,” said Fields. “That  helps the incident commander get a visual perspective of the problem and he can make better decisions.”

The only data that is recorded and kept, says Fields, is data collected around brush fires so that the LAFD can do a damage assessment, which can later be turned into map layers to keep records of hotspots.

As for data that could be sent back to China, Fields says that any mapping of critical infrastructure is done without connecting to the internet. “It’s being collected on the drone and 90% of that information is how the drone is operating. There is some information of where the . drone is and how it is and the [latitude] and [longitude] of the drone itself… That’s the data that’s being collected,” Fields says. 

From Fields’ perspective, if the government is so concerned about the use of drones made by a foreign manufacturer, there’s an easy solution. Just regulate it.

“Let’s come up with a standard. If you use them in a federal airspace these are the check marks that you have to pass,” he says. “Saying that DJI drones are bad because they come from China [and] let’s throw them all out… that’s not an answer either.”

Space is becoming a major area of startup and commercial investment, and so I’ve decided to start providing a weekly round-up of the biggest news in aerospace, space science and space-related technologies. Let me know if you appreciate this or have suggestions, and I’ll make sure it evolves as needed to be useful resource.

This week, there was an abundance of spacesuit news, and signs from multiple operators that there’s going to be an orbital traffic boom in the immediate future. Also, we’re heading into the annual International Astronautical Congress (IAC) this coming week, so expect a lot more news starting tomorrow.

1. NASA unveils its Artemis-generation spacesuits

NASA showed off a brand new generation of spacesuit, including the one that the first American woman and next American man to set foot on the Moon will don for that historic moment. The new Artemis suits are designed to scale from essentially the smallest to the largest possible adult human frame, which NASA touts as a way to make the astronaut program more accessible to a wider range of Americans. The agency should be going out of its way to fix that, because of what happened that led to item #2 this week.

For the first time, NASA is looking to outsource the full production of these Artemis-generation spacesuits (including the Orion survival suit, which was also revealed today and will be worn only during flight aboard the Orion capsule). To that end, it has put out a request for input from industry about their design and development ahead of setting up a proper RFP.

2. NASA astronauts Christina H. Koch and Jessica Meir complete historic first all-woman spacewalk

NASA astronauts Christina H. Koch and Jessica Meir

As I alluded above, there was a very good reason that NASA really emphasized how inclusive its Artemis suit designs are: The agency had to cancel a first all-woman spacewalk earlier this year because it didn’t have the right amount of properly sized spacesuits on board the International Space Station. It sent one up in June, however, and that historic moment happened this past week, with Koch and Meir performing a roughly seven-hour spacewalk to repair a power controller.

3. SpaceX applies for permission to launch 30,000 more Starlink satellites

That’s on top of the 12,000 it’s already had cleared, which makes for a total potential constellation size of 42,000. That’s about 8x the number of satellites currently in orbit, across all orbital zones. It’s a move that is definitely raising the ire of both industry and space researchers, because it’ll make it a lot more complicated to ensure orbital spacecraft avoid collisions, and it could potentially obscure the view of the stars from Earth. SpaceX says it has taken steps to ensure it can avoid both problems, but not everyone is convinced.

4. Swarm gets the ‘OK’ for its 150-satellite constellation

Meanwhile, startup Swarm has been granted FCC approval to deploy its own, much-smaller constellation of 150 satellites. Swarm isn’t competing directly with SpaceX’s Starlink – it wants to provide low-bandwidth IoT connectivity. And while it isn’t looking to put up a huge volume of spacecraft, there was some concern that its toaster-sized satellites might be too small to track and present a risk that way.

5. Rocket Lab’s swap launch is a success

New Zealand-born and lately U.S.-headquartered Rocket Lab was successful in launching its fifth Electron rocket this year. The startup’s success was more a proof point for its business model than its technology, however, since the payload that flew aboard this mission was actually one that wasn’t slated to go up until much later in the queue. Rocket Lab’s original client for this one had to drop out due to unfortunate circumstances, and Rocket Lab was able to get client Astro Digital an earlier ride. This kind of late-stage payload swap has not typically been a strength of the established commercial space launch industry.

6. Under Armour built some fancy tracksuits for space

Richard Branson’s Virgin Galactic will begin ferrying wealthy paying tourists to the very edge of space next year, if all goes to plan, and now we know what they’ll be wearing when they do: Under Armour. The sportswear company and Branson’s space enterprise unveiled the new suits at a flashy special event featuring the first tourists who have reserved $250,000 tickets aboard Virgin Galactic’s atmosphere-skimming spacecraft.

7. How Lockheed Martin’s Venture arm spends its $200 million in available funding

Lockheed Martin has been in the commercial space business since there has been a commercial space business to be in, and around a decade ago it established a corporate venture fund to make strategic bets on startups. I sat down with the fund’s GM and Executive Director J. Christopher Moran to talk about what the fund looks for in startups – and the industry giant is a lot more interested in early stage companies that you might have thought. Extra Crunch Subscription required.

Hey everyone. Thank you for welcoming me into you inbox yet again.

Last week, I talked about the eternal dumbness of the smart home and how Google had a big chance to lay out their vision this past week. Guess what? They did not, instead we got a new more expensive Google Wifi that falls under the Nest brand as well as a Google Mini that can be wall-mounted…

If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.

The big story

Zuckerberg had an interesting week, delivering a very rehearsed keynote that was neither in front of Congress or an audience of developers at F8. He spoke at Georgetown on the topic of free speech and Facebook’s brand of capitalism.

It was an odd speech, but it was an opportunity for him to speak at length about what he saw as Facebook’s mission in terms of free speech

Facebook is in an interesting position here, where they’re tying a moral stance with an economic one. They seem to draw the line at paid ads and paid political speech whereas everything before it was so nuanced. I don’t like that very much.

Unrestricted speech on the internet has been an evolving topic. There’s the very real argument that giving people a megaphone to harass and bully minimizes other people’s ability to have unrestricted speech themselves. Facebook and most of the other major platforms have agreed with this and have put policies in place.

There’s also the situation where someone is threatening or discussing violence or hate speech. Again, Facebook goes further than the law requires and has this firmly in their policies.

If you look at the company’s existing policies that have been put in place over the past few years, you would find plenty of guidelines at odds with sections of Zuck’s speech and yet he seemed to be drawing a big red line here and now, with the only reason being the criticism of Facebook’s ad policy that allowed Donald Trump to pay for and target ads that were ostensibly untrue.

I wrote about the situation in full here and it rings true again after Zuckerberg’s speech. Timing is everything and it’s hard to take this moral stance seriously right now especially.

Send me feedback
on Twitter @lucasmtny or email
lucas@techcrunch.com

On to the rest of the week’s news.

(Photo by Steve Sands/WireImage)

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

• Sprint + T-Mobile = official best friends
  The FCC has reportedly decided to let another massive merger go through (after some decent concessions), allowing T-Mobile and Sprint to proceed in their massive telecom merger.
• Switch sales surge
  Nintendo has already made a major splash with the Switch, but the traction it’s gaining in North America has already eclipsed its last-gen system’s worldwide unit sales. Check out their latest milestone.
• Justice Dept takes down a massive child exploitation site
  The government infiltrated and clamped down on a massive child exploitation dark web site this week and my colleague Zack has the full rundown.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

1. $35B lawsuit against FB can move forward:
   [$35 billion face lawsuit against Facebook can proceed]
2. AOC and Ted criticize Apple:
   [Apple’s China stance makes for strange political alliances as AOC and Ted Cruz slam the company]

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Welcome to TechCrunch’s China roundup, a digest of events that happened at major Chinese tech companies and what they mean to tech founders and executives around the world.

The talk about U.S.-China relationships over the past two weeks has centered heavily on the NBA controversy, which has put the interest of some of China’s largest tech firms at stake. Last week, Houston Rockets general manager Daryl Morey voiced support for Hong Kong protests in his since-deleted tweet, angering China’s NBA fans and prompting a raft of local tech companies to sever ties with the league. But some businesses seem to be back on track.

Tencent, which is famous for a slew of internet products, including WeChat and its Netflix-like video service, has been NBA’s exclusive streaming partner since 2009 and recently renewed the deal through the 2024-25 season. As many as 490 million fans in China watched NBA programming through Tencent in just one season this year, the pair claims.

The basketball games are clearly a driver of ad revenue and subscribers for Tencent amid fierce competition in China’s video streaming market, but following Morey’s statement, the company swiftly announced (in Chinese) it would suspend portions of its broadcast arrangements with the NBA. Popular smartphone brand Vivo and Starbucks’s local challenger Luckin also promised to pause collaboration with the NBA.

It was a tough call for businesses having to choose between economic interest and patriotism, and Tencent was tactful in its response, pledging only to “temporarily” halt the streaming of NBA “preseason games (China).” As public anger subsided over the week, Tencent resumed airing NBA preseason games on Monday. After all, the content partnership reportedly cost Tencent a heavy sum of $1.5 billion.

Entertainment giant turns to education

TikTok is probably the Chinese Internet service being most closely watched by the world at the moment. Its parent firm ByteDance, last reportedly valued at $75 billion, has ambitions beyond short videos.

This week, more details emerged on the upstart’s education endeavors through a WeChat post by Musical.ly founder Lulu Yang, whose short-video startup was acquired by ByteDance and subsequently merged with TikTok. Yang confirmed he was helping ByteDance to develop an education device in collaboration with phone maker Smartisan’s former hardware team, which ByteDance has absorbed. The product, which leverages ByteDance’s artificial intelligence capabilities, will be a “robotic learning companion” for K-12 students to use at home.

The news arrived in the same week that ByteDance’s flagship video app TikTok announced producing educational content for India, where it’s used by 200 million people every month. The move is designed to assuage local officials who have vehemently slammed TikTok for hosting illicit content, as my colleague Manish Singh pointed out.

Diving into education appears to be a sensible move for ByteDance to build relationships with local authorities, which can at times find its entertainment-focused content problematic. The multi-billion-dollar online education industry is also highly lucrative. ByteDance, with 1.5 billion daily users across TikTok, Douyin (TikTok for China), Toutiao news aggregator and other new media apps, is in a good position to monetize the enormous base by touting new services, whether they are educational content or mobile games.

Also worth your time

• A total of 53 major video streaming services in China have introduced a “safe mode” for teenagers as of this week, state media reported (in Chinese). During the controls mode, underage users won’t be able to search for content, send real-time comments or private messages, upload or share videos, or reward live streaming hosts with virtual gifts. It’s part of China’s national effort to protect young people from consuming harmful digital content and internet addiction, which has also spawned age checks processes in Tencent games. 
• Xiaohongshu, a fast-growing social commerce app in China, is back in Android app stores nearly three months after it was banned by the government for undisclosed reasons. Rumors had it that the service, which was reportedly valued at more than $2.5 billion last year, was used to spread pornography and fake reviews. It’s hardly the first tech company hit by media regulation, and it can probably learn a thing or two from ByteDance, which has aggressively ramped up its content moderation force following a sequence of crackdowns by the government.
• Meituan will partner with 1,000 vocational schools in the country to train as many as 100 million workers from the service industry over the next ten years, the Hong Kong-listed company announced (in Chinese) this week. Food delivery makes up the bulk of the on-demand services giant’s business but its footprint spans a wide range. The classes it provides to prepare workers for a digital era will also touch upon skincare, hair styling, manicure, plastic surgery, hospitality and parenting, a program highlighting the extensive reach of technology into Chinese people’s every life.
• Chinese workers turn out to be big advocates for the application of AI. According to a survey by Oracle and research firm Future Workplace, workers in India (60 percent) and China (56 percent) are the most excited about AI. Japan, where the labor force is shrinking, ranks surprisingly low (25 percent), and the U.S. has an equally mild reaction (22 percent) toward the technology.

This week Mark Zuckerberg gave a speech in which he extolled “giving everyone a voice” and fighting “to uphold a wide a definition of freedom of expression as possible.” That sounds great, of course! Freedom of expression is a cornerstone, if not the cornerstone, of liberal democracy. Who could be opposed to that?

The problem is that Facebook doesn’t offer free speech; it offers free amplification. No one would much care about anything you posted to Facebook, no matter how false or hateful, if people had to navigate to your particular page to read your rantings, as in the very early days of the site.

But what people actually read on Facebook is what’s in their News Feed … and its contents, in turn, are determined not by giving everyone an equal voice, and not by a strict chronological timeline. What you read on Facebook is determined entirely by Facebook’s algorithm, which elides much — censors much, if you wrongly think the News Feed is free speech — and amplifies little.

What is amplified? Two forms of content. For native content, the algorithm optimizes for engagement. This in turn means people spend more time on Facebook, and therefore more time in the company of that other form of content which is amplified: paid advertising.

Of course this isn’t absolute. As Zuckerberg notes in his speech, Facebook works to stop things like hoaxes and medical misinformation from going viral, even if they’re otherwise anointed by the algorithm. But he has specifically decided that Facebook will not attempt to stop paid political misinformation from going viral.

I personally disagree with this decision, but I think it’s something about which reasonable people can disagree. However I find it deeply disingenuous to claim that this is somehow about defending free speech. If someone were to try to place a blatantly false political ad on any platform or network, would anyone seriously consider a decision not to run that ad an attack on free speech? Of course not. And they shouldn’t take the converse argument seriously either.

The larger issue, though, is that Facebook seems to think that if an algorithm is content-agnostic, it is therefore fair. When Zuckerberg talks about giving people a voice, he really means giving those people selected by Facebook’s algorithm a voice. When he says “People having the power to express themselves at scale is a new kind of force in the world — a Fifth Estate,” what he actually means is that Facebook’s algorithm is itself that Fifth Estate.

The belief is apparently that any human judgement based on content beyond the absolute minimum required by law and implied by the social contract — i.e. filtering out hate speech, abuses, or dangerous medical misinformation, all of which he stresses in his speech — is dangerous and wrong, and that this goes for both native content and paid advertising. According to this belief, Facebook’s algorithm, so long as it is content-agnostic, is definitionally fair.

And that belief is just flat-out wrong. As we’ve all seen, “optimizing for engagement” all too often means optimizing for outrage, for polarization, for disingenuous misinformation. True, it doesn’t mean favoring any side of any given issue; but it does mean favoring the extremes, the conspiracy theorists, the histrionic diatribes on all sides. It means fomenting mistrust, suspicion, and conflict everywhere. We’ve all seen it. We’ve all lived it.

Facebook’s decision to accept political ads regardless of content is essentially a logical extension of how their algorithm optimizes for engagement. It speaks to their belief that as long as they don’t pass judgement based on content, their ongoing, ceaseless editing of what people see and don’t see — and please call it censorship if you think this is any way about freedom of speech — is therefore fair and just. This belief was defensible ten or even five years ago. It is not defensible today.

But it is also not going to change. Facebook’s original sin is not political ads; it is optimizing for engagement so that their users see more ads of all kinds. That’s what needs to change for Facebook to become a positive force in the world … and it’s also what never will, because that engagement is the fundamental engine of their business model.