Visible Hands: Updates on Australian News, Facebook’s Transparency & SPACs 💲

We have updates on a few stories we’ve followed in the past.

We’re experimenting with something new! We have updates on a few stories we’ve followed in the past. Reply back to us with any feedback; next week, we’ll be back to our regularly scheduled Visible Hands.

NEWS IN AUSTRALIA

Back in September, we wrote about Australia’s proposed legislation that would make it so Google and Facebook would no longer be able to host news content for free. Here’s the full explainer. The entire disagreement is over Australia’s proposal that news organizations and Google & Facebook bargain for licensing and if they can’t agree, then the issue would go to arbitration where a judge would decide a fair price. 

In October, Google announced it was creating a $1 billion fund to license content for a product called Google News Showcase, where news would be licensed as story panels in Google News. Australia was in the proposed cut of companies they announced, likely because of the legal challenge to Google there. 

But the story doesn’t end there -- it actually got ratcheted up a few days ago. Australia’s Treasurer said it was “inevitable” that Google would have to pay for media content. Google on the other hand, says the proposal is “unworkable”; Google would have to pay media companies for displaying snippets of articles in search. The response has been a threat to stop serving news in Australia. 

Much of the issue boils down to bargaining power. Currently, news organizations cannot easily bargain with major tech companies because of the number of news substitutes and the disparity in relative size. Even some legislation in the U.S. has looked to change that, like the Journalism Competition and Preservation Act (introduced in 2018 and 2019), which would allow media companies to collectively bargain with technology companies (media companies currently cannot under antitrust laws). 

FACEBOOK & DATA

We’ve written in the past (back in May) about Facebook’s content moderation efforts, oversight board and lobbying. This week, there was more news about Facebook’s transparency efforts. Facebook announced it is going to give outside research more information about how and why political ads get shown to certain users. This is long overdue progress; Facebook first said in 2018 that it would give researchers access to platform data. 

However, Facebook continues to be opaque, it seems, in their pricing of political ads. The Markup studied different candidates’ ads and found large discrepancies that would be intolerable if charged by other types of media: “In swing states, Biden paid average ad rates of $34 compared with Trump’s average of $17 in July and August.” But this data does not seem to be included in Facebook’s release. 

Twitter also made an announcement this week that they want it to be easier for researchers to analyze tweets to study disinformation. It seems unlikely that the new administration isn’t a prime reason for this greater transparency. 

SPAC-TACULAR

Back when we covered SPACs in October, we wrote that gross proceeds had exceeded $56.3 billion.That number reached $83 billion by the end of the year. This year’s already seen $20 billion from investors, that’s almost 25% of last year’s total and we’re still in January! 

Many of the companies SPACs find to merge with are unprofitable and require less due diligence than it would to take a company public in the traditional way. In late December, the Securities Exchange Commission (SEC) released guidance on disclosures for SPACs. These disclosures are focused on conflicts of interest, terms of securities issued to sponsors, and business combination transaction disclosure considerations. Biden’s selected SEC Commissioner, Gary Gensler, is expected to be even tougher on financial regulation. 

Nonetheless, the SPAC bonanza continues. Currently SPACs are bringing in over 70% of all money raised in IPOs this month, according to the WSJ. Now there are SPAC ETFs. And the WSJ ran a major feature this past week about SPACs, highlighting that Shaq and Paul Ryan both have SPACs. 

• Two Wall Street Firms Took Huge GameStop Losses After Admitting Defeat To Redditors: “‘Even though we have been called boomers many times over the past week, we understand the changing dynamics in the market, and with that, we’ll become more judicious when it comes to shorting stocks," [Andrew Left of Citron Research] says. "It doesn’t mean the industry is dead, it just means you have to be more specific.’”

• Discord Bans r/WallStreetBets For Hate Speech Violations: “On both Discord and Reddit, WallStreetBets users frequently refer to themselves collectively as “retards” and “autists,” and have been known to deploy the kinds of racial slurs and deliberately offensive language that have become commonplace in 4chan-style posting forums.”

• Progressives Are Seething Over Biden’s Likely Pick for Banking Regulator: “The person leading the [Office of the Comptroller of the Currency] will have the choice of applying a moderate touch to banking regulation — modifying little beyond reversing some of the Trump administration’s most dramatic rule changes — or fundamentally altering how the government influences banks’ everyday business when it comes to racial equality, climate change and the industry’s deepening links to giant technology companies.”

• Union Participation Rose Last Year, Even As Pandemic Wreaked Havoc on the Jobs Market: “Union participation has been on the wane for decades, shrinking from about 30 percent of the nonagricultural workforce in 1964 to 20 percent in 1983, when the modern record-keeping began by the BLS, to about half of that today.”

• Covid Has Made Inequality Even Worse. The Only Answer: Squeeze the Super-Rich: “Bezos has added roughly $100,000 to his wealth for every one of his Amazon employees. As was said of captains of industry in 1918: “They look as if they have done very well out of the war.”

• Twitter and YouTube Banned Steve Bannon. Apple Still Gives Him Millions of Listeners.: “While social media companies have become more willing over the past few months to censor accounts that engage in hate speech, podcasts are still largely unmoderated.”

Thanks for reading! Please invite any friends, roommates, coworkers, armchair activists, and r/wallstreetbets readers to join the movement. See ya next Thursday!