The FTC’s Fine Against Facebook Is Just a Slap on the Wrist

Dear Reader,

I’m waiting for the details of my various meetings in D.C. to be finalized. As I told you yesterday, I’m traveling to Washington to meet with lawmakers.

I’ll speak with them on the future of blockchain technology and what the government can do to help the country stay competitive in this bleeding-edge technology.

I’m expecting some spirited discussion given the recent attention that Facebook has received around its plans for Libra, its own global currency.

Speaking of Facebook, we have to talk about the FTC’s “crackdown” on Facebook. Then we’ll take a look at a very smart move from Amazon. It’s something I think all large corporations – at least the smart ones – will have to start doing or risk becoming obsolete. Lastly, we’ve got another breakthrough coming out of the CRISPR genetic-editing realm. I can’t wait to share it with you.

The FTC hits Facebook with a “landmark” fine…

News just came out that the Federal Trade Commission (FTC) hit Facebook with a record $5 billion fine. The fine was in response to Facebook’s mishandling of users’ personal data.

Everybody knows about the Cambridge Analytica scandal… But Facebook’s list of improprieties spans way beyond that.

The New York Times (NYT) hailed this as a “landmark” settlement. It said the settlement signals regulators’ more aggressive stance towards the country’s most powerful tech companies.

As usual, The NYT is dead wrong.

To most people, $5 billion sounds like a lot of money. For Facebook, it’s a drop in the bucket. The company is sitting on $45 billion in cash right now. And it will generate about $15 billion in free cash flow this year. In context, this fine is just a slap on the wrist.

And here’s what The NYT really missed… Facebook will have free rein to be even more aggressive after paying this “landmark” fine. That’s because the FTC isn’t going to reopen this case again any time soon. In the FTC’s eyes, Facebook will have paid the price.

Facebook knows this. It knows it has a green light to carry on with business as usual.

And for Facebook, the FTC’s timing couldn’t be more perfect. Facebook will visit Capitol Hill this week for some congressional hearings. The focus will be on antitrust issues and the Libra cryptocurrency.

When asked about what the company is doing to right its wrongs, Facebook can now point to the FTC’s fine. It can say that it has been punished… and will learn its lesson. That will help alleviate regulatory pressure.

As I mentioned, I will be on Capitol Hill this week also. I am meeting with several prominent members of both the House and the Senate. We will be talking about regulations as they pertain to cryptocurrency and blockchain technology.

My job is to help represent the blockchain industry and make sure we don’t get overregulated. We want the U.S. to remain globally competitive in the space… And that won’t happen with a heavy-handed approach to regulation.

Look for some notes from the road from me on this later this week…

Amazon’s $700 million employee retraining program…

This is amazing news… Amazon just announced that it will retrain 100,000 employees in various technical skills… including artificial intelligence (AI) and machine learning.

The cost? $7,000 per person.

That’s right… Amazon is spending $700 million to retrain its workforce over the next six years.

I can’t emphasize enough how smart this is.

Amazon knows that it needs new skillsets across its labor force. It can see where the industry – and the world – is going. But Amazon also knows that it would be difficult, and expensive, to find new employees with the desired skills.

So, instead of looking outside the company, Amazon is looking within. It already has the employees… Why not retrain them? This avoids employee turnover… increases morale… and gives current employees the skills they need to survive over the next two decades.

This is exactly what large corporations should be doing today. They should be working to upgrade the skillsets of existing employees… especially when it comes to AI and machine learning. Technology is just moving too fast to stand still.

Simply put, the days of going to school… learning a trade… working at your trade for 40 years… and then retiring are over. The world is changing too fast for that model to survive.

We have to evolve. We have to retrain. And we have to always be learning. That’s the only way we can keep up with this pace of technological advancement. Personally, I’m on my fourth career now… And it likely won’t be my last.

And by the way, this move from Amazon comes at a perfect time…

Amazon will also be on Capitol Hill this week. Inevitably, a politician will ask: “What are you doing for society, Amazon?”

And it can respond: “Well, we are spending nearly $1 billion to retrain our employees with new skills.”

Nobody else can say that.

It won’t happen, but I would love to see Amazon turn the question around… “And we would like to know, U.S. government… What is the government currently doing to prepare the U.S. workforce for the world of AI and machine learning?”

The founder of CRISPR is at it again…

Feng Zhang is the scientist from the Broad Institute of MIT and Harvard who filed the first patent on CRISPR-Cas9 technology. This was the patent that set the foundation for CRISPR genetic editing. Zhang is one of the most prominent genetic-editing scientists in the world.

Well, just last year, Zhang started an exciting new company called Beam Therapeutics. The company is developing precision genetic therapies with the goal of curing all human disease. This is one of the most promising biotechnology companies I know of.

Beam raised $87 million in its Series A venture capital round last May. And it raised another $135 million in its Series B round back in March. In total, $222 million of smart money. Impressive.

That money is funding some incredible development… And Zhang just announced that Beam has discovered a new way to treat brain diseases like Alzheimer’s.

This is on the bleeding edge.

Zhang just published his research… And it’s a very novel approach. Nobody has figured out a good treatment for Alzheimer’s yet… But this might be it.

As I was going through the research, it hit me that the potential applications of CRISPR are seemingly endless. This technology can be used in so many ways… I have no doubt that the end of all human disease is coming.

And I would not be surprised to see Zhang spin out another company focused solely on brain diseases based on the research that he just published. That’s what the best scientists do. They develop breakthrough approaches that lead to several companies backed by bleeding-edge intellectual property.

Now, Beam Therapeutics is still private. But this is one I’ll be watching very closely. It will be a fantastic investment opportunity after it goes public. Expect to hear more about Feng Zhang in the near future.

Regards,

Jeff Brown
Editor, The Bleeding Edge

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