Freedom in Retreat — CEO Daily, Tuesday, 14th November
It’s been nearly seven years since the Arab Spring threw a spotlight on social media’s ability to fuel freedom movements around the world. Unfortunately, what we have learned in the years since is that those same social media tools can be used to abuse and restrict freedom.
This morning, Freedom House releases its annual report on Freedom on the Net. CEO Daily got an early look, and the global picture it paints is dim. Nearly half of the 65 countries reviewed in the study saw declines in Internet freedom, with the biggest declines registered in Ukraine, Egypt, and Turkey. Only 13 countries saw improvements—most of them minor.
While Americans are focused on reports of Russian efforts to interfere in the U.S. election, similar sophisticated campaigns to manipulate social media occurred elsewhere. According to Freedom House, manipulation and disinformation techniques played an important role in elections in at least 17 other countries over the past year. In some cases, those disinformation efforts were aimed at disrupting those in power; in others—the Philippines, Turkey, Venezuela—they were used to protect ruling regimes.
Beyond manipulation, the report finds an increasing number of governments have shut down mobile service at times for political or security reasons. And some also are blocking live video services—like Facebook and Snapchat live—to prevent broadcast of political protests. Cyber attacks on political opponents and rights groups also are on the rise. And several companies followed the lead of China—which gets the lowest score in the Freedom House survey—by restricting Virtual Private Networks, which are used by many companies to enable employees to access corporate files remotely.
A couple of pertinent stats. Of the 3.4 billion people who have access to the Internet around the world:
- 63% now live in countries where people were arrested or imprisoned for posting content on political, social or religious issues;
- 52% now live in countries where social media or messaging apps were blocked over the last year.
You can find the full report here. Its lesson: like most new technologies, dating back to the invention of fire, social media is neither good nor evil—but it provides considerable power to both.
More news below.
• Mnuchin Draws a Tax Line in the Sand
Treasury Secretary Steven Mnuchin told The Wall Street Journal that a standard corporate tax rate of 20% is a red line for the administration and that it won’t accept anything higher that emerges from the House and Senate’s attempts to reconcile their two bills.
WSJ, subscription required
• Powerhouse of Europe, Again
Germany’s economy grew a faster-than-expected 0.8% in the third quarter, raising the annual growth rate to 2.3%. That’s well above the country’s medium-term trend and will reinforce fears of overheating against a background of sustained easy monetary policy at the ECB, which refused to set an end date for quantitative easing earlier this month. However, as in the U.S., inflation refuses to react, with wage pressures barely more visible than in the U.S., at least for now. Elsewhere in the Eurozone, Italy notched its best annual growth rate in six years at 1.8%, but the recovery slowed in France, Spain and the Netherlands.
• Qualcomm Rejects Broadcom
Qualcomm rejected Broadcom’s $105 billion bid for it, saying that the $70-a-share offer “significantly undervalued” it, but implicitly inviting a higher bid. #GLWT, said the market, which pushed Qualcomm only 2% higher, reflecting the perception that the initial bid was sufficiently rich.
• Amazon Sells China Cloud Business
Amazon has sold its Cloud hosting business in China to its local partner for a sum estimated at up to $300 million. It’s an admission that Amazon Web Services, the global leader in Cloud hosting, can’t straddle both sides of the Great Firewall, and it illustrates the impossibility of building a truly global Internet-based company in such circumstances.
Around the Water Cooler
• Donald Trump Jr. Was in Touch With Wikileaks in 2016
Donald Trump Jr. had repeated contact with Wikileaks during the 2016 election campaign, according to documents that leaked (!) from the Congressional investigation into Russian election hacking to The Atlantic. Wikileaks had published emails from the DNC and senior Democratic officials, including Hillary Clinton’s campaign manager John Podesta, with a view to discrediting Clinton ahead of the election. U.S. intelligence agencies have concluded that the emails were stolen by Russian intelligence. Wikileaks has denied that but refuses to say how it obtained the emails.
• Eli Lilly’s Azar to Head HHS
President Donald Trump said he’s nominating Alex Azar, a former top executive at Eli Lilly, to be the next Secretary of the Department of Health and Human Services (HHS). Trump’s previous HHS Secretary, Tom Price, resigned in September following a scandal centering on his use of private chartered jets on the taxpayer dime. The appointment may raise eyebrows, given Trump’s record of bashing the pharma industry for excessive drug pricing.
• McConnell Calls on Moore to Withdraw
Senate Majority Leader Mitch McConnell called on Roy Moore to withdraw from the special election to fill the vacant Alabama Senate seat, after a fifth woman accused him of sexual harassment. The woman, Beverly Young Nelson, was 16 at the time, and Moore was district attorney for Etowah county. Moore denied the allegations and said McConnell was the one who should resign. Most of the rest of the GOP caucus in the Senate sided with McConnell.
• Axa Plans Stock Market Return for Equitable
Europe’s largest insurer Axa filed for an IPO of its U.S. unit which includes the life insurance giant Axa Equitable and a majority stake in investment bank AllianceBernstein. The move is consistent with those of other big insurers such as Metlife in trying to reduce regulatory capital requirements. Axa’s core business, like the rest of the European insurance sector, remains hobbled by chronically low capital market rates that mean it is earning next to nothing on many of its assets.
WSJ, subscription required
Summaries by Geoffrey Smith; email@example.com