Power Battle Reports — #91

Good morning,

I’m back in Berlin after an intense week (good things) in Stockholm.

Isn’t it funny how the brain is like a bucket? If you fill it with too much information at once, it becomes hard to think, because the thoughts keep running over.

On Friday, I napped twice because my head was so full of thoughts it made me dizzy. But, after some sleep, running, and time alone, I’m getting back on track.

I hope you’ll enjoy the reading!

Anna

Biden Administration set to restrict outbound US investments in China’s defence industry

GEOPOLITICS

The Biden administration is reportedly finalising an executive order to restrict outbound investments in China’s defence industry, with plans to release it later this summer. The aim is to prevent China from gaining a military advantage in targeted technologies, but the administration wants to avoid unintended consequences and uncertainty for investors in the United States.

The US has made efforts to coordinate these regulations with European and G7 allies, causing some delays in the release of the US executive order. At the G7 summit, the members made progress in aligning international approaches to China, with a shared assessment of the challenge and recognising that outbound investment restrictions are necessary. The leaders agreed that certain Chinese economic practices posed a risk to the global economy and pledged to “de-risk” their relationship with China rather than completely decouple. However, Beijing criticised the G7 summit as being “anti-China.”

The Biden administration has been actively pursuing policies to address competition with China on critical technologies, including implementing export controls on semiconductor technologies. Officials have been gathering feedback from think tanks and investment firms to fine-tune the executive order. While there is no set date for its release, there is a focus on getting the policy right and ensuring the rules are easily understood and enforceable. The order is expected to target several industries, such as semiconductors, artificial intelligence, and quantum computing.

Amid strained China-US relations, plans for high-level visits by Secretary of State Tony Blinken and Treasury Secretary Janet Yellen to China remain on hold. However, President Biden expressed optimism for a “thaw” in relations soon. In addition, Commerce Secretary Gina Raimondo met with her Chinese counterpart in Washington this week, presenting an opportunity to improve relations between the two countries.

The French parliament is trying to address the “influencer jungle” with a new bill

BUSINESS / INTERNET

French MPs and senators have agreed on a bill to regulate commercial influence and address abuses on social media. The joint committee of the two chambers of Parliament, the Assemblée Nationale and the Senate, unanimously adopted the text, ending what they called the “influence jungle.” The bill now awaits a final vote next week.

Defining commercial influence activity as the mobilisation of an influencer’s notoriety in exchange for payment by a third party, the two assemblies had to resolve their differences on several critical aspects of the law, including the definition, threshold, and transparency of influence, combating scams and ensuring compliance with EU laws. Additionally, lawmakers agreed that all advertising or sponsored videos must include a mention of “advertisement” or “commercial collaboration”, regardless of the video’s duration.

The bill also addresses public health concerns. France will not ban the promotion of pharmaceutical or para-pharmaceutical products, but they will impose restrictions on promoting nicotine products, surgical or cosmetic medicines, and therapeutic abstention. However, the bill covers the protection of minors and animals since it prohibits the promotion of gambling activities to children, and bans advertising wild animals, except for professionals like zoos.

In addition, influencers will be required to have civil liability insurance within the EU, and legal representation within the EU will be necessary for non-resident influencers to ensure compliance with EU and French legal systems. The European Commission is expected to provide its opinion on the bill’s compatibility with EU regulations by the end of July, and the compromise text will undergo final votes in the Assemblée Nationale and the Senate on May 31.

EU warns Twitter after withdrawal from Code of Practice on disinformation

DISINFORMATION

Twitter has withdrawn from the European Union’s Code of Practice on online disinformation. Twitter’s previous management had committed to the EU Code on Disinformation in 2018, but Elon Musk seems inclined to challenge the EU’s speech moderation regulations. The decision prompted a warning from the EU’s internal market commissioner, Thierry Breton.

Musk has also reduced moderation staff and increased the price for external researchers to access data, which has been detrimental to combatting disinformation on Twitter. In addition, Musk’s resistance to the EU’s digital rulebook suggests deliberately defying the EU’s efforts.

Although the EU Code of Practice on online disinformation remains voluntary, it complies with the broader DSA. Twitter’s withdrawal from the code increases its regulatory risk and invites potential sanctions for non-compliance with the DSA. This clash between Musk’s vision for Twitter, which appears aligned with far-right political ideologies, and the EU’s stance against disinformation may result in a costly battle.

Twitter, as a “very large online platform” (VLOP), must comply with the EU’s Digital Services Act (DSA). Under the DSA, the platform must assess and mitigate risks related to disinformation and face penalties of up to 6% of its global annual turnover for non-compliance.

While the United States might tolerate Musk’s approach due to constitutional protections for free speech, the EU has taken a firm stance against anti-democratic manipulation. Musk’s continuous promotion of conspiracy theories and transformation of Twitter into a platform that caters to far-right influencers contradicts the EU’s objectives. As a result, an expensive conflict with EU regulators appears imminent, and failure to comply could even result in Twitter losing access to the EU market.

Double-check the headlines

Just making sure you didn’t miss any major world events this week.

• From last week: China is calling in loans to dozens of countries from Pakistan to Kenya

• The United States has agreed in principle to lift the debt limit for two years while cutting and capping some government spending over the same period.

• Serbian border troops were put on high alert after clashes inside Kosovo between police and ethnic groups injured more than a dozen people.

• In Iran, Niloofar Hamedi and Elaheh Mohammadi, who reported on the death of Mahsa Amini, face charges of conspiring with foreign powers.

• 1,500 people were arrested at an Extinction Rebellion protest in The Hague.

• The Republican governor in Iowa rolled back the state’s child labour law protections allowing teenagers to serve alcohol in restaurants.

• Canadian privacy regulators are launching an investigation into ChatGPT-parent OpenAI’s data collection and usage for its artificial intelligence tools.

• Turks are voting in a significant presidential run-off to decide whether or not Recep Tayyip Erdogan should remain in power after 20 years.

• Florida Governor Ron DeSantis, a top rival to Donald Trump, announced that he is joining the race for president in 2024.

• Experimental brain-spine computer interface helped a paralysed man walk.

• A Chinese social media influencer died soon after live-streaming himself drinking several bottles of strong alcohol on China’s version of TikTok.

• TikTok sues Montana over the state’s ban of the app. The Chinese-owned company says the Montana law banning its popular app suppresses free speech

• America’s biggest car and home insurer will not sell new home insurance policies in California, citing wildfire risk and construction cost inflation.

One long

IEEE Spectrum

Just Calm Down About GPT-4 Already — And stop confusing performance with competence.

Interview with Rodney Brooks, former MIT, Carnegie Mellon and Stanford University faculty member, serial entrepreneur — and AI sceptic.

Five short

1. Listen

America has as many as eight parking spaces for every car. And LA might be the most extreme parking city on the planet. Parking regulations have made building new affordable housing or renovating old buildings nearly impossible. And parking has a massive impact on how the city looks. But it hasn’t always been that way. Listen to this episode of 99% Invisible, and learn about the policy that has reshaped American cities.

2. Read

The New York Times has published their summer reading recommendations: 47 books, 47 adventures: Here’s something to read for every creature you know. Pile up for hiding in the shade.

3. Remember

You don’t need to have opinions on everything.

4. Change

I made looking for pre-owned things the default, and life became about intentional curation rather than owning. It feels more meaningful, is a lot more fun, and has significantly influenced my style and aesthetic preferences in general.

5. Try

I have an ongoing dare with myself: Wearing all the items I own that I’ve never worn before. So far, it’s only been a positive experience.

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