States vs. Social Media, Adobe Acquires Figma, and Guest Marta Tellado

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Hi, everyone.

This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm in Vegas.

Yeah, I know.

I can tell.

That's why it took us so long to get ready today.

What's going on, Scott?

What are you doing in Vegas?

There's absolutely nothing going on because it's fucking 7 a.m.

in Vegas and no one should be up right now.

I'm shocked

the room next door hasn't called security.

What are you doing in Vegas?

Why are you in Vegas?

You left me in New York and then you were gone.

I woke up and you were gone.

Let me just say.

Yeah, I got up at 4.30 in the morning to catch a 6 a.m.

flight to Vegas.

Again, the world has got to figure out I am not a morning person.

Yeah.

I came here and I met with my friends Lee Lotus and Adam Markman.

We have been coming to Vegas for exactly 40 years.

Anyways, it's

a nice tradition, and I'm speaking here tomorrow at a conference.

So, and then I go home.

Oh, wow.

Finally, to London.

What's going on with you?

How was your weekend?

I did house stuff all week, and we hung pictures and stuff like that.

It was very nice.

We did

a house.

What's the deal?

No, I just haven't hung the pictures since I moved in.

So we hung up all the family pictures, which was really nice.

I got to find a good one of you to put up on our family wall.

A friend of family.

Yes, it's a big one.

Something nice.

Something.

Maybe the one I put up on Twitter.

Did you like the gun show that I put up on Twitter?

I think the world liked it.

Hello.

Hello.

I look very orange.

You do.

I will say that.

No, but you look good.

Let me just say you look good and people really appreciate it.

Thanks for that.

Anyway, listen, the other thing I was working on, I just met this morning with Mr.

Bankoff and Naima Raza, my producer.

The new show is starting next week, Scott.

My first episode drops Monday, and I'll be offering Scott-free advice.

So if you want my guidance, call 1-888-Kara please.

That's 1-888-K-A-R-A-P-L-Z and leave a question.

So I want you to be the first question.

Kara, please.

That's what it is up there.

Kara, please.

It was that or Kara WTF?

That's literally like the sitcom Frasier in hell.

It's called on, right?

It was Kara what?

Yeah, on.

It's on with Kara's Wisher.

You're on.

It's on.

What I don't get is I'm obsessed with other people's affirmation.

So I go to the rankings all the time.

You're ranked in like the top 100 podcasts, and you haven't even done one yet.

It hasn't started.

I know I'm popular with the people.

I'm popular with the people.

But how could they even download any of that?

I don't know because I have to start a whole new feed.

All right.

Today we'll talk about the latest turn for Texas social media law.

Also, Adobe's using the lasso tool on Figma.

We'll speak with the Consumer Reports Marta Teyato about how online marketplaces trick shoppers.

But first, new reporting shows that Russian trolls are behind the divisive post aimed at 2017 Women's March.

Operators from Russian troll farms, a really great story.

Reportedly spread Islamophobic conspiracy theories about one of the march's co-chairs, Linda Sarsour.

She eventually resigned from her post.

The organization grappled with infighting.

I mean, this is what was interesting is that they're targeting specific people and then they're, I don't want to say assets in the United States, but they're the people then, a lot of like pundits then got on this thing and they were being manipulated by the Russians.

By the way, the New York times ran some pretty divisive stories about the women's march but nonetheless it was interesting that the you know that this happened that they're targeting individual people which you're going to see more of i think because it works we've been talking about this for a long time yes we have

imagine you're one of the very bright people working uh for an adversary and you don't have the economy you don't have the freedoms and you just don't have the resources to compete with kinetic power

russia literally literally can't afford an aircraft carrier, and the one they built doesn't work.

So it's like, okay, we can try and, I mean, the key to any battle is you just don't fight on their terms.

Right.

If someone starts bullying you on Twitter and they have a 1.1 million strong following, but you don't try and compete with somebody on Twitter.

You don't fight on your enemy's terms.

And so these guys have said, okay, we can't compete with them on kinetic power.

The U.S.

spends more on the military, kinetic power, than the next 10 nations combined.

So to say, instead of building an aircraft carrier, which costs $4 billion or probably a lot more than that today,

we'll spend $100 million and we'll create a troll farm.

We'll create a list of the thousand and the 10,000 and the 100,000 people who are most critical of us.

We'll slowly but surely create fake accounts that look semi-fake and we'll start undermining their credibility.

And then around key issues, which is even more mendacious, we'll try and inflame people.

It's like the third grade where when people start having words, other people around them start screaming, fight, fight.

Well, imagine that they had a million people encouraging all Americans to fight with one another.

And here's the thing that's so disappointing about it: it's addressable.

Twitter and Facebook and Google will all throw up their arms and go, you know, it's just the world we live in.

And TikTok, as you've noted recently.

And TikTok.

And guess what?

They could absolutely fix most of it.

The moment we start finding them or say, look, I mean, in the case of Twitter, you could argue that when they are bringing divisiveness around really important issues like this, and the issue enough gives Americans enough reasons not to like each other, much less when people coming in start making us like each other even or like each other even less, Twitter has never made money.

If you took all the losses,

it's a net loser.

And then it's doing this shit.

I mean, Twitter, it's getting to the point.

Oh, that may be why.

They don't have the money to do it.

That's always been the same.

Oh, they could absolutely solve this.

Enforce identity.

Enforce identity.

I get it.

Instead, they want to continue to lie to their advertisers about the engagement and number of people on the platform.

They could absolutely fix this.

I think the worst is it does inflame other people.

And then, say, pundits get involved and attack based on that.

And then it's more and more and more.

And then you just, it affects you in real life.

I mean, this story, I think it was interesting.

The reporter was telling them how the Russians were manipulating.

He didn't know it.

You know, thought it was just.

people who didn't like her.

Anyway, it was really, it's really worth a read.

It's kind of fascinating how easy it is to troll someone.

And speaking of different kinds of trolling, eBay employees will be in court this fall for a bizarre harassment case.

What's going on there?

Have you done it?

Yes.

I knew the CEO who was involved.

He wasn't involved directly, but a couple who ran a niche newsletter about e-commerce and eBay is suing after they say employees tried to intimidate them into removing negative content from their publication.

Employees allegedly stalked the couple, published their address, sent them live insects, a funeral wreath, a bloody pig mask.

Seven employees pleaded guilty individually, and the couple is also suing eBay as a whole, arguing the effort was company policy.

It affected the CEO, everything else.

Just so strange.

I mean, really, it's such an odd,

I don't even understand that a company would let this continue within a company.

You could say it, but then do it is really something else.

Not only that, it's eBay.

It's kind of like when you find out the dorky kid with glasses is bullying people.

You really like him.

He's been bullying people.

Yep.

You just didn't think eBay would even, I mean, I don't know.

It's like, oh, no, eBay's angry at me.

It just seems kind of

strange.

You know how they try and intimidate me?

Is they call me and ask to speak to me?

What do you do?

You say no, right?

You don't want to engage.

I generally say, like, I generally say, look,

on any of my content, whether it's calling in, posting a response and a comment, DMing me or messaging me on Twitter, I will repost, I will like, I will bring some sunlight to your views.

And the only reason you're reaching out to me and kissing my ass is you obviously disagree with my views.

But I have no desire to meet with these people and have them, you know, give me their IR speak.

I don't, I'm not a journalist.

I don't need to hear both sides.

And I find that they bias me because I like them and they're nice people.

And when I, you know, and I stop speaking my mind.

So I'm like, you know what?

I don't, I don't need to meet.

I'm just done meeting with

people who are just like manicured and clearly just so biased and paid.

And anyway, I'm just not good at it.

I don't know how to handle it.

You just have your opinions and leave Scott alone.

Do not bother him.

Leave me.

Do not bother him.

He's in Vegas.

I'm in Vegas.

Meta, by the way, Meta is seeing a mega crash.

Shares of the company are down 14% this week.

The stock is down more than 60% for the year and is close to its pandemic low.

Meta predicted in July that sales would fall another quarter.

I mean, where do you, you've been predicting the stock back and forth for a while.

I'd love to get your thoughts without having you talk to a PR person from Facebook, but it's really suffering a lot more than I thought it was going to.

Meta's at a five-year low, and I think that fortunately for us, they continue to inflict injuries that are self-inflicted.

And Reality Labs is already, I think, probably, I mean, a lot of people push back and say, you haven't seen the games, and there's a lot of people who love it.

I think they're all full of shit.

I think this is arguably one of the biggest strategic errors in the history of modern business.

What could they have done, though?

Oh,

there's a lot they could have done.

There's a lot of acquisitions.

They could have tried to double down on different types of social media.

I'll tell you what they could do is what they're doing now.

They are totally taking their howitzer cannon of cash and they're going after TikTok.

They're investing more in short-form video.

And distinctive, what Kylie Jenner thinks about missing the old Instagram, they are like, nope, our new RD department is no longer snap.

It's TikTok.

But they have taken some very talented people and a massive amount of cash flow.

And under the auspices of the most arrogant decision in the world, they thought, well, not only are we going to create a metaverse for gaming, for business, for entertainment, we're going to try and do it all and think we can do it all.

And none of it works.

Well, let me give you some statistics.

So it's at $146, almost $147 a share.

Now, all time, it's up 283, 284%,

but it is the market cap is now $394 billion.

The PE ratio is a very reasonable 12.

It's really, is it a buy then?

I mean, because it's really, it's nearing in on its early numbers, I guess.

It's not, it's, it's, well, it was lower than that, sure, but I'm just saying it's not in a good spot.

Well, it's the, it's the first time.

I mean, Twitter, Twitter, which is proving to be a, you know, the shitty business that keeps on not giving, grew the revenues.

Facebook's revenues actually, for the first time, declined year on year.

Right.

And so what you have is a company that appears to have a control CEO who has got his head up his ass strategically, makes these big, bold, bad bets,

and is also under a world of hurt in terms of

what's come to light about how they delay and obfuscate around very serious issues regarding the Commonwealth.

And it's also proving to be a business that's hit a wall.

And it has not only that, it has this apex predator.

So how would you play it?

Facebook?

Yeah.

I mean, if you look at this just on emotionally, which is difficult for me, Facebook, I don't think you want to go short Facebook.

I think Facebook is probably a buy right now because it's trading at a PE

of a kind of an old economy company, old economy media company.

And the reality is it still has a direct connection with 3 billion people

and still has incredible ad tools.

So I mean, I would not, let me put this, I would not want to go short the stock right now at a PE of 12.

It's trading it, you know, it's trading it like what an autumn, you know, what an old, it's trading it like what, in terms of multiples, like what a Viacom trades out.

Yeah, exactly.

What's interesting is compare it to Apple, which is PE ratio is only 24, but it's all-time, it's 1888,837% up.

Like, that's the difference between 200 and some.

Really quite amazing.

We'll see where it goes.

So, stock, possibly a buy, but we'll see where it goes.

But let's get to our first big story.

A federal appeals court is making the internet safer for shit posting.

Last week, the fifth U.S.

Circuit Court of Appeals lifted a ban on Texas's social media law.

Their shitty social media law.

That's the one that would prevent platforms from removing posts on the basis of viewpoint.

The law's supporters say it protects free speech.

Social media companies say it would hurt their ability to keep platforms safe and remove harmful content.

The law has been blocked by the courts on and off for the last year.

Now it's remanded to a lower court, so this isn't over.

This continues these laws.

It's really a fascinating time.

We had Casey Newton on to speak on it earlier this year.

He said that there should be a digital space that's not corporate owned.

I don't know what to say here.

This is getting this, if this law stays in place, real problem for tech companies.

But it's the exact opposite.

Under the auspices of the cloud cover of free speech, they're violating free speech.

Free speech is not only your ability.

I mean, the whole thing is just so strange because it starts from the position of an incorrect assumption that these private companies have some sort of fidelity to the free speech or some sort of obligation.

They don't.

That's correct.

And when you tell a company that you can't take down certain content, you're telling them what content they must have, which is a form of editing, which is a form of denying someone's free speech.

If Fox doesn't bring on AOC and Elizabeth Warren at the end of every broadcast to give their view,

that's

by the tautology of this case or this ruling, that is violating free speech and that Fox should not be able to take down certain comments.

It just, this thing just makes, maybe, what am I missing here?

It makes no sense to me.

It's a private company.

I know.

It's got to go to, it's got, this has got to go to the Supreme Court.

And I worry, the thing is, how will it affect speech that conservatives want to censor abortion pills, critical, that means those things can stay up, right?

Presumably.

This is the problem is this has gone down a free speech path when it has nothing to do with free speech.

And I agree that these companies have free speech too.

And we'll see how it plays out, but it's got to move to the Supreme Court.

I don't see how any other way

this is not going to be.

And it'll be problematic because if this stays, then every other state can will have another, just like with abortion, a patchwork of rules in every state, which will make it very difficult for these companies to do anything but let anything go.

Like, right?

That's the whole thing.

And then we're right back where we started with all these other issues that they hate speech, all kinds, and everybody could say.

If conservatives want total free speech on a platform, they have it.

It's called 4chan.

So go hang out on 4chan.

And also,

True Social, you know, they've claimed that our parlor or all these things are.

They get tossed off of platforms.

They get tossed off of, you know, Truth Social is not on Google still, I think.

But 4chan is basically Twitter with no rules.

4chan gets a tiny fraction of the traffic Twitter does.

These platforms are successful because of moderation or somewhat successful, not despite it.

And it just makes absolutely no sense that you would move into a private company and start telling them, this is saying to a private company, this is what content you can and cannot have.

Well, it plays to the base again.

Everything plays to the fucking base.

You know, that's what's so crazy about this is that it's really aimed at a very small group of people, just like the immigrant, the really heinous thing that Ron DeSantis did.

This is all, this is for Abbott and Ken Paxton in Texas to do this.

We'll see unintended consequences here.

Same thing with Governor Newsom signing a bill that aims to protect children's data from tech companies.

The bill prohibits tech platforms collecting the geolocation of users under 18 years old.

It forces them to use the strictest privacy settings.

The tech lobby opposed the bill, too.

Now, there's a lot of people I respect who really are against this bill because it says there's more surveillance, there's more proving of who you are, there's more problems going forward with this.

And they thought it was sort of a hammer, just way too big a hammer.

So there's all kinds of

people had a lot of problem with this, whom I respect, how this bill is going to be rolled out and the specifics of it, which could mean more surveillance of kids than less.

What do you think about this?

I think in its own way, it's sort of, it's a more benign

version of what's happening on the far right.

And that is governors Newsome and DeSantis and Abbott are all like, look at me, I'm running for president.

So they're trying to put forward press releases that rally their base, regardless of their legitimacy, their veracity, if they'll be effective.

I mean, it's one thing, it's one thing to have bad tech legislation that

quote-unquote aims to protect children.

It's another thing, it's like, okay, what Newsom is doing is probably ineffective and doesn't make a lot of sense.

That's a dumpster fire.

What is a nuclear mushroom cloud is when you weaponize weaponize migrants who are vulnerable and you get into the business of human trafficking, and you have someone who is anonymous and not truthful about their identity say, hey, I can send you somewhere.

Here's a free plane ticket.

Get on a plane.

Purely for a political stunt.

This is so vile.

It's really descended to the next level around a political stunt when you treat people that way, when you lie to them and basically traffic them.

So, yeah,

Newsom's posing for the woke cameras, posing for the left with a bill that says, you know, protect children, which something, it's not going to work.

Everything I've read about this thing says, okay, what?

All kinds of problems.

All kinds of problems.

But then again, you talk a lot about protecting young people, right?

And protecting girls, especially, and things like that.

So some of the ideas, they should have been doing this themselves.

And of course, they didn't do a lot of this until there was more pressure.

You know, they didn't start doing things like this.

And they were, you know, starting Instagram for kids.

But, you know, it's called the California Age-Appropriate Design Code.

And it was pushed by someone from Britain.

This, I guess, she's a baroness of some sort or whatever.

It could affect children far beyond the state, prompting some services to introduce changes nationwide because California does affect everybody else.

But many say it's too broad and too vague to carry out.

They press California legislature to narrow the bill's definition of a child to a person under 16 rather than 18.

They warn the bill's wide focus on online services or general audience likely accessed by children would subject far too many sites and apps to the needed bills requirements.

Civil liberties groups say that they could be very invasive age verification systems.

So, I mean, sometimes they scream bloody murder and then they work it out.

This legislation is any of this legislation, including Amy Klobuchar's bill that is the only one left is this antitrust bill.

Everybody has problems with any way you deploy any of it, but it seems as if it is, you're right, playing for the cameras.

Yeah, look, I've been thinking about

what has really driven our global economy the last couple hundred years.

And the gift that kept on giving in terms of wealth creation was hands down was fossil fuels.

We've been an oil economy for over a century.

And anytime you have that kind of massive wealth creation, there's never a free lunch.

There's always serious externalities.

There's serious downsides.

And we are now paying an enormous price.

What do we know about externalities?

The incumbents try to wallpaper over them.

And then the longer we let them go, the more expensive they are to unwind.

And we're seeing that play out in Technicolor with climate change and with carbon.

The social media and tech companies have created unprecedented value given the amount of time they've been around.

And the externalities are massive.

Teenagers, just as their brains are becoming aware of social status, their brains aren't able to modulate the disappointment around it.

And a lot of teens are subject to depression.

And then we bring in these things that massively overstimulate them or present them their full selves 24 by 7.

You're always in the cafeteria, and yet they haven't developed the skills to modulate them or not get upset about them.

And we have literally, we have between 1 and 4,000 parents in emergency rooms every night across the nation because their kid has gotten so depressed, they don't know what to do.

And they take the kid to the emergency room.

And then, guess what?

The emergency room doesn't know what to do because they haven't seen this until about 2012 when social went on mobile.

Yeah, mental health issues.

There's just basic, basic things we need to do.

I cannot cannot check into, I'm staying at the Cosmopolitan Hotel.

I can't check in here without identity.

I couldn't get on a plane without identity.

I couldn't get into goddamn Uber without proving my identity.

Why on earth would we let people say things to children, divide us around Roe v.

Wade without proving who they are?

And then there's this edge of edge case.

And we had one of these New York Times reporters on two years ago, and I wish we'd push back harder.

That, well, what about the human rights attorney in the Gulf?

The edge of edge of edge case, I'm willing to give that up.

And by the way, you could solve that problem.

You could have technology that just says, okay, you get an anonymous account.

And as long as you continue to tweet around these issues, and we believe this is a real account, not a fake account, they could figure this out.

But we have not, we have refused, we have refused to address these externalities, and they are dividing us.

They are depressing our teens.

And social media is becoming really social is becoming an incredible menace.

And it's a lack of leadership on our government officials.

These companies themselves, I mean, it's just hilarious that we're waiting for their better angels to show up when they've shown that they really don't care.

I mean, they really haven't taken a whole lot.

But the externalities here, we have

the biggest coal plants in history

belching carbon into the air called social media companies.

Use the word belching.

Belching.

The damage that's being done here is striking.

It is.

I would agree.

I would agree.

You know, my, my, it's a good speech.

My son, Alex, he has a box.

I didn't even know he bought this from Amazon that he puts his phone in and he can't open it.

He like sets like four hours when he's doing stuff.

And it goes into the box and it he can't get it out.

I did it by himself.

I thought this was really healthy.

I thought it was quite something.

So it sits there and he can't access the phone whatsoever for the time.

He's either being quiet or he's doing homework or he needs a break and stuff like that.

I think it's a, I'm going to get myself a box.

My son is smarter than I am.

All right, Scott, let's go in a quick break.

And when we come back, Adobe makes its biggest bet ever.

And we'll speak with a friend of Pivot, Marta Teyado, about how consumers can stay safe in the surveillance economy.

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Scott, we're back.

Adobe has designs on the future of the web, a company we don't talk about a lot, but a very important company.

Last week, the software giant announced it will acquire Figma for $20 billion.

Figma is the company behind popular web design software, the same name used to create apps and websites.

But only design choice the market saw was bright red lines.

Adobe stock fell 17% after the news of the deal.

It's worst day since 2010.

$20 billion is Adobe's biggest acquisition by far.

You know, this area is interesting.

Vigma was a rare competitor to Adobe.

Canva is another who actually advertises on this show sometimes.

What's the deal?

Is the FTC going to get involved or do you, is this a good idea?

I don't know.

I mean, what I know of, I don't know the specifics of the, I don't feel as if I know enough about the competitive dynamics to weigh on whether the FTC should get involved.

What I do know is that Adobe is probably one of those companies that doesn't get the attention or the management team there they deserve because Adobe kind of kicked off the whole SaaS recurring revenue bundle revolution.

I mean, it used to be you'd pay $1,300 for Adobe Director or, you know, whatever it was called.

And then they said, I know, we're just going to charge you $24.99 a month for everything updated real time in the cloud.

And the stock got cut in half.

And that was not easy.

That must have been a couple of rough earnings calls.

And by the way, since then, I think it's up 20x.

And it inspired this whole movement.

When you have recurring revenue bundles, you can better plan your capital spending.

You can update stuff more real time instead of like, okay, start creating a list of everything for our next launch and then try and get people to buy

a box with software in it.

So

Adobe is an amazing company, but I don't know much about Figma.

Do you have any thoughts on this?

Yeah, no, it's been its competitor.

There's a couple competitors, these collaborative design platforms.

Adobe can't be the most innovative in this space, but I mean, I think The Verge's headline on this was absolutely correct.

Adobe's Figma acquisition is a $20 billion bet to control the entire creative market.

Obviously, Adobe's big in creative apps, and they wanted to create the most interesting and popular design tools before it got too big.

It's like Amazon buying a Ring or Echo or things like that.

And I think it's that idea is they didn't think of themselves.

And this is a great company and getting it off the market.

It creates a better thing for them.

That's the question.

But I think it's really important to look at this space a lot more because it really is.

Adobe has been running everything.

There's all these interesting competitors along the edges.

FTC should definitely look at this kind of the idea because there is really no other bigger company in this area than Adobe.

And again, it flies under the radar quietly, but it does control quite a lot of the market in the creative app area and making things.

And there's a lot of little interesting ones.

Again, like Canva is another one.

There's a bunch of them.

You know, they've been trying to do it themselves, but they absolutely cannot think of all the good ideas by themselves.

So therefore they buy.

Makes sense.

Yeah.

Speaking Speaking of the FTC, the regulator is clocking in for gig workers.

After a vote last week, the FTC will investigate labor practices to companies that employ gig workers like Uber and Lyft at issue whether companies misrepresented a worker's earnings potential and whether companies unfairly colluded to set rates and keep worker pay down.

So far, most rideshare regulation has come from state and local governments.

The FTC is now weighing it.

I mean, this is something you talked about about a year ago, but haven't talked about for a while.

The bad news is we have enormous issues.

The good news is they're all, you know, as far as I can tell, they're all solvable.

We passed this legislation on climate, and they're saying by 2030, which is not that far away, we could reduce our emissions by 40 percent.

I mean, the fact that that's even possible absolutely means we can address climate change.

And

when we talk about income inequality, when we talk about homelessness, when we talk about mental illness for young families that are under huge economic strain,

an increase in minimum wage wouldn't solve any of them, but it would help all of them.

And we have this ridiculous debate around unions all the time.

It's like, okay, here's the issue.

They don't work, but people still need to have dignity and work.

You union buster, but go ahead.

People still need to, no,

I am so down with a union called the U.S.

government.

$25 an hour federally mandated minimum wage.

And everyone clutches their pearls.

and says, oh my God, from $7.25 to $25, if it had just kept pace with inflation or productivity, it'd be a $23.

So let's give everyone a $2 raise from where it should be.

And what would happen?

Absolutely, a bunch of stocks would go down.

Uber stock would get crushed.

Absolutely, some restaurant companies and some small businesses would go out of business.

And guess what?

It'd all be worth it.

And overnight, we'd say to a lot of people in America, work.

And you want to get rid of, in my opinion, and I'm going to push it back here.

I think a lot of pride and a lot of things that help people

get out of their heads and stay focused.

Something that's healthy for people is work.

And you'll draw more people back into the workforce, and they say it would destroy jobs.

There's no evidence in states where they've raised minimum wage that it has destroyed jobs.

It's reallocated jobs.

But

I'd like to see a political candidate run on, we are going to have a massive raise in minimum wage across the state.

There are states where they don't even allow unions.

Anyways, I think we could solve a lot of our issues by bringing dignity back to work with one union called the U.S.

government.

It is time to level up lower and middle income employees.

And then we wouldn't be dealing with all these things.

It's unfair labor.

We spent a lot of time on this issue, you know, these regulations.

And if they had to pay people this amount as minimum wage or figure out some other relationship with them, it would certainly be better.

Anyway, we'll see.

And now we have to bring in our friend of Pivot.

Marta Tejadu is the president and CEO of Consumer Reports and the author of Buyer Aware, Harnessing Our Consumer Power for a Safe, Fair and Transparent Marketplace.

That's a mouthful.

She joins us to share advice on how to stay safe and private in the online marketplace.

Welcome, Marta.

It's great to be here.

Good to see you both, Karen and Scott.

Thanks.

So big tech hasn't always viewed as a danger to society, the marketplace the way it is today.

Let's talk about how it changed.

And then I do want to get into sort of tips.

Consumer Reports has served a great role in society for a long, long time.

Later to the online stuff, but you're doing a lot more of that.

I've been at one or two of your events.

So, where are we now?

Well,

I think Consumer Reports has been around for 86 years, and we've seen the whole gamut of how the marketplace shifts and change, and how the balance of power shifts away from consumers.

And I think what we've said is we've had this proud history of creating standards and rules and guardrails for the marketplace in the analog world, in the hardware world.

And part of my ambition when I came to CR was really: what are the harms in that digital world?

And are the rules, protections, and standards migrating from the analog to the digital?

And I think we all know the answer to that.

It's not.

And so, how do we raise our voices as consumers?

How do we document the truth of what is happening?

What is not transparent?

Because I think the only way that we can,

what we do know is that we've lost trust in our governing institutions.

We've lost trust in the marketplace.

How do you get that back?

You can, you only rebuild that if you can actually hold both government and the marketplace accountable.

And you only can do that with transparency.

We do not have that in the digital world.

So our effort really is how to raise consumer voices and consumer power in that digital marketplace, knowing we still have work to do in the hardware.

And I talk about that quite a bit in the book as well.

But that's really the focus.

One of the issues you have is that people really like this stuff.

They really like to use it.

They get a lot of of efficacy out of it.

Are we too late?

Are consumers screwed in that way in terms of the power balance?

I don't think so.

I think, look, we love this too.

We love the fact that we have our cars now are

computers on wheels.

And forever, we were there when seatbelts weren't.

locked into cars and we had to fight for that.

We had to fight for the backup camera, saving lives.

Now

we love all that life-saving technology.

We have the data data to demonstrate that it is life-saving.

We have no mandate that says that has to be in every car.

Okay, it's a luxury item.

Okay, so we're fighting for that.

The moment we told manufacturers we would not rate their cars in the top 10 best picks.

If they didn't include those life-saving technology standards, the market started moving.

It started shaping in a different way to put consumers first.

I think that's consumer power.

I think that's why we have the millions of people we have coming to us.

I think there's still trust.

So, I don't think it's too late.

And when I say we've been here before, we have to think about a time where there were many harms to us that were not transparent.

One of my inspirations was Rachel Carson's Silent Spring.

That was a teachable moment for all of us.

It's going to take a while.

We have to think about a world that we're not imagining currently that is really consumer first by design.

And those are the rules and standards that we need to have to hold both government and the marketplace accountable.

Marta, so my question is more about consumer reports.

In a world of TripAdvisor and user reviews, and Amazon user reviews and Twitter, how does consumer reports stay relevant?

What is it that you think consumer reports brings or the pain point it solves around evaluating products that we don't get now from this kind of real-time 24 by 7 feedback loop we have on almost everything?

I think we're different from a lot of those platforms that you're talking about.

I think we remain a nonprofit.

So that means we don't accept any advertising.

It means we, you know, 90% of our revenue is earned by our members.

And so I think that trust remains there.

But we also use the information that we have and the testing that we have to fight for what's fair.

Right.

So we use the data, we use the documentation, and we create laws that change the marketplace, that shape the marketplace.

I think that's very different from finding out which product is best for you.

I want you to have that product.

I want you to have that quality, that value, but I also want to codify the standards that are going to make that happen, not just for you, Scott, but for the entire marketplace.

And we have to do that by keeping our pulse on consumer sentiment, by the relationships that we build, and the pressure that we put on both corporations and

our government policymakers.

I think that's a very very different role that we've played.

And I think we've seen a lot of success.

This is that moment.

This is that watershed moment where we have to bring our superpower to the table.

So can consumers realistically stand up for themselves?

I mean, again, they like the stuff they're using and they don't have a lot of information.

Most of things are quite transparent.

There's what's the very, very opposite to that.

Talk about recourses.

What are you all focusing in on?

Obviously, you've done privacy stuff.

You've done all kinds of things, but it doesn't seem to get through to everyone in an angry way that you need, you know, see that's the way seat belts did or something else.

So how do you how do they stand up for themselves and how do you get them motivated to do so?

I think I named it buy or where because the operative order is aware.

And I think we have to do a job and really raise that awareness and to recognize the power that we have as consumers, right?

It's a marketplace.

There's supply and demand.

And demand has been very quiet and very complacent.

And I think we have to raise our voices and balance that.

Yeah, give me specific examples of the things that are the most pressing from a consumer reports perspective.

Well, I think it's no accident.

That's going to be about competition.

We've always been about competition, and I don't think that our antitrust laws are keeping up with the pace.

That's another way of setting standards and competing.

Well, that bill I just interviewed Amy Klobuchar seems doomed, but maybe not.

I don't think our future is going to be pinned on one bill.

I think there's much more to do.

I've been there, done that, as you know.

I worked in public service.

I think the misinformation is also something.

Again, it's that trust.

How do we build that trust?

I think there's a lot of corporate behavior that is not being held accountable, corporate impunity, overreach, the data that they are sucking out of our own personal identities, the choices we are being given.

I could tell you right now, algorithmic bias.

Now, the market is not fair and just if a person who lives in a black community is paying more for their car insurance than someone in their white community.

I think consumers think, I have a great driving record.

I'm going to get a fair price.

That's not how it works.

And we had to do that research.

We had to break that story.

to make that happen.

Sure.

So what's the most important research you could be doing online, specifically online?

Well, I think there's an enormous amount of research that we're doing to create digital standards.

We as a society have not come to terms or have had a conversation about what is ethical digital corporate behavior.

So I think we created a digital standard.

The moment we put that up in an open source way, we started getting calls from manufacturers.

Where's the bar?

How high?

How can I do that?

So the one thing we're doing now is we're developing the nutrition labels that you have on products, on food.

I think we need those nutrition tables on all our devices.

I think we have to know what that device is doing to you for you.

And you can make an informed choice about that.

We don't have that yet.

I'm not going to wait for the National Institute of Standards and Testing to do that.

They're talking about it.

We're going to go ahead and do it.

So I'm curious if you've observed a dramatic decrease in service levels.

I just pulled up because I know Consumer Reports covers hotels.

I'm obsessed with hotels.

By the way, I'm in Vegas, Marta.

I know you were wondering where I am.

And my sense is the way you would describe every consumer offering in the hospitality space right now, whether it's an airline, except for JetBlue Mint, which does an amazing job.

But most airlines and most hotels have figured out we can use inflation and we can use COVID as cloud cover to massively raise prices, massively underserve, love bomb you when you check in with a text message saying we're here 24 by 7.

And then when you call and say, where's my room service?

I ordered 90 minutes late?

They say, sorry, COVID.

Because they've decided not to pay people more, but they see an opportunity for massive profitability and not pay their people.

And I've seen, I have never seen a service, and I realize I sound like the mother of all Karens right now, but I travel a lot.

I have never seen this dynamic before where we're going to raise prices 30%

and massively decrease our services levels.

I mean, it's just striking what has taken place in the consumer world around hospitality.

I'd love to add to that, Scott.

So yes, you put your finger on something else really nefarious about the hospitality and many others is the hidden fee economy, where you get on those search and they tell you it's going to cost you this.

And then when you see the bill, there are so many fees that have been tacked on that are not transparent to you, that weren't factored into

the algorithm when you chose it.

That's what we have.

We have a hidden fee economy that does not tell you what the value and the real price of what you're agreeing to right up front.

And

I think it's important to understand, a lot of folks don't know our history, but one of our first board members was

Philip Randolph.

It's no accident.

He was also somebody who stood up for workers' rights, right?

Because they understood that the strength and power of our democracy is intricately related to the economic fairness and justice of our marketplace.

And I think that still holds.

And we have a real imbalance here.

And as I said, the arc of the book for me was really a story about our democracy and that it can't flourish unless we have a marketplace that's both fair and just.

I try to rip the veil on some of that in very practical ways for consumers at the end of every chapter.

But in terms of the larger changes that we have to make, that's a longer road.

And it's not something that CR alone is going to be able to do.

So if you had to pick one of these many online marketplace laws, what would you do?

Companies buying, selling, and using consumer data through third parties?

Should we ban the practice outright?

Should it be more disclosure?

If you could pick one thing, what would it be of all the things that you recommend?

Well, I think we have to use our imagination.

What I would love to see is a future where we use our imagination and we have a marketplace that is safer by design, that respects our privacy by design, that

is a force for making sure that misinformation, that we have trusted information by design.

The products that we have now, the platforms are products.

They are not safe, they are not private, and

the competition is not forcing them in that direction.

So,

that is what we need to see, and consumers have to demand that.

Another world is possible,

but

we have to be a force for that.

When you, as a consumer, knowing as much as you do about the intersection between service and offering and expectations and what they could offer and what they do or do not offer, when you buy a car, when you go into a restaurant, when you check into a hotel, when you buy pharmaceuticals, what industry do you think is the most abusive or least responsive to consumer needs?

I think right now

I want to focus on the digital marketplace.

I think that is where the harm and the lack of standards and the lack of self-policing is demonstrating some real harms, not just in the marketplace, but as I said earlier, in our democracy.

I think that's the three-alarm fire right now.

That doesn't mean we've solved all the problems on the other side of the equation.

We're still fighting for those and incentivizing the market in the absence of mandates.

But I have to say, I would choose the digital.

We agree, Marta.

Okay.

All right.

The book is called Buyer aware harnessing our consumer power for a safe fare and terance a thank you transparent marketplace well done you can also find some helpful resources at buyeraware.consumerreports.org thank you marta thank you so much thank you for making room all right one more quick break we'll be back for wins and fails

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Okay, Scott, let's hear some wins and fails.

What do you got this week?

And by the way, our hearts go out to the people of Puerto Rico without power.

Hurricane Fiona wiped away infrastructure built after Hurricane Maria, but our hearts go out to them.

Okay, my fail, if you will, is

a tenured professor at Columbia University basically said, okay, what do you know?

We've gone from 18 to number two.

That's That's bullshit.

All we've done is gamed the very dumb and the very

useless and the very damaging thing known as college rankings.

And he said, and this is really causing a lot of controversy, he basically outed Columbia as studying to the test and cheating

and manipulating the rankings.

And there's a few things in the university system.

We talk a lot about student debt.

We talk about exploding costs, but something that has really been damaging is something that I'm sure they didn't intend for it to be this damaging is the rankings.

Because in the ranking is this exclusivity metric.

And that is the lower or the fewer people you let in, and quote unquote, which means the more money you're spending because they take these gigantic, bloated, increasing administrative costs, spread it across fewer students, and they say, oh, look how much we're spending on each student.

So a lot of this methodology leads to a gestalt where universities become rejectionist in order to get higher and higher in the rankings, in order to have more pricing power, such that me and my colleagues can answer the question we ask ourselves every morning, and that is, how do I increase my compensation while reducing my accountability?

And they come up with all these departments that the rankings like that never go away, that serve absolutely no purpose and have no measurable outcome.

Let's create a leadership and ethics

department.

Anyways, this guy, this professor, has basically outed his own university as being totally misleading.

And they have had to come out.

Columbia has had to come out and say, you're right.

We lied in order to manipulate these rankings.

And you don't even blame these universities to a certain extent because these rankings have become so important.

Yeah, well, you know, it matters, right?

Yeah, yeah.

Hugely matters.

When you're making this.

That's a fail then, correct?

Okay.

That's my fail.

100%.

It's marketing.

U.S.

News and World Report, the college ranking is not only dumb, it's not only a terrible way.

There There is no difference effectively other than it being in New York or then

any great college is a great college.

And the notion that

they even have the arrogance to say, oh, this is number four and this is number 11 is ridiculous.

Let me just push back on one thing is that what is the best way then to give students good knowledge about schools?

There is some idea of how to do it.

You know what I mean?

Like, because I'd like to know more.

I know a lot lot more about like a car.

Like I can find out all kinds of information.

So how do you do that best in a way that's rigorous, I think, is just like anything else.

There are key metrics.

Okay.

So one is, and so for example, Berkeley does a great job of this.

How much money does it cost you relative to your increase in your earnings power?

Right.

People go to college for economic security.

And that's the entire mission of higher ed.

What percentage of Pell students, Pell Grant students, do you have?

I mean, there's all kinds of metrics, in my view, that better reflect the quality of a school.

But to basically shape the rankings, to create this externality of rejectionism, it would strike me that the editors would sit down and say, you know, we're not bad people.

We didn't mean to do this, but we've created something that's had enormous negative impact on middle-class households.

Yeah.

So sell yourself.

Yeah.

Anyways, that's my fail.

My win is Camilla and Harrison,

two wonderful young people.

One works at a large search engine.

One works at a VC firm.

They were employees, early employees at L2, the firm I started in 2010, and they were wed this weekend.

Jake Matthews, another lovely young man, super smart,

athlete at Cornell, who was also an L2 employee, got married this weekend.

As did Mabel McLean, this incredibly bright, hardworking person.

She covered Amazon for us, also got married this weekend, works at Chanel.

And this is a bit of a recommendation here.

Not only is it a win, because these are all good people who have found other good people to partner with, but Camilla and Harrison met at work.

They met at L2.

And

my advice to young people is, if it's not an office, get somewhere every day where you have the opportunity to meet other people.

And I think there's an enormous crisis.

And people get triggered when they say, well, no, I work from home, boomer, da, da, da.

They get angry.

My advice is this, if you're under a certain age or you haven't found, you think in your life you would like more relationships in your life, whether it's friends, whether it's mentors, whether it's romantic partners, figure out a way to be around strangers every day in the context of building something.

I don't care if it's a nonprofit.

I don't care if it's work.

I don't care if it's church.

But we have a

casino.

There you go.

There you go.

Hello.

You're going to meet a lot of people.

Daddy needs new shoes.

Oh, baby needs new shoes.

But we need, young people need to be around other people.

You get a dog, the first thing they tell you is socialize to get to the dog part.

I like your whole thing of meeting people.

It's very sweet.

It's very sweet.

I would like to meet less people.

Well, we're at that age.

I don't want to be around other people.

That makes sense.

And other people shouldn't be around me too much.

Let's be honest.

But young people, kids, everyone was like, this is terrible.

Our kids aren't in school.

My kid needed school, but more than anything, my kids needed other kids.

And

it is wonderful.

Work is a great place.

A third of marriages begin at work.

Yep.

I like that you're on this bandwagon.

I like you and Elon on the marriage and children bandwagon.

Well, there's nothing.

Look, that's, we forget what the means.

We talk about the means.

We talk about innovation.

We talk about economic growth.

The whole shooting match around an economy is to create a middle class.

And the whole reason we have a middle class in economic security is so we can invest in relationships.

I agree.

And create the stress or take stress away from the absence of relationships.

So anyways, my win is Jake and then Mabel McClain, and then I'll just use their first names, Camilla and Harrison, who met at L2.

That is a mitzvah.

That is me patting myself on the back.

All right.

Scott the Yenta.

It's so nice.

That's a very lovely thing.

Well, I think the only fail would be the Trump rally yesterday with everybody with the hand signals was weird and strange.

It's

actual.

That's what the fuck.

I know.

He's moving into QAnonville.

Although, on the positive side, his numbers are way down.

People really have had it with him and these stunts and these ridiculous, hateful.

Did you see it?

It felt sad.

There's no one there.

It did.

I'm still scared of it.

I'll tell you.

When I was interviewing Ken Burns last week, I said, Are you hopeful?

He said, No, Ken Burns is not hopeful.

He's scared.

He sees signs everywhere after doing this holocaust.

And that's what I would say is a win.

You should watch his Holocaust

documentary.

It's really great.

And so that would be my win, except it's a fail because it's about a terrible thing, but it's a win to watch it.

All right.

We want to hear from you.

Send us your questions about business tech or whatever's on your mind.

Go to nymag.com slash pivot to submit a question for the show or call 855-51 pivot.

Scott, that's the show.

Are you leaving Las Vegas right now?

I'm going home Tuesday night.

That's it.

I'm headed home.

Ugh, London.

We'll be back on Friday for more.

And Scott, read us out.

Today's show is produced by Lara Naiman, Evan Angle, and Taylor Griffin.

Ernie Intertot engineered this episode.

Thanks also to Drew Drew Burrows and Meil Silverio.

Make sure you subscribe to the show wherever you listen to podcasts.

Thanks for listening to Pivot from New York Magazine and Vox Media.

We'll be back later this week for another breakdown of all things tech and business.

Camilla and Harrison, best wishes.