🇪🇺 Europe’s new tech rules are serious


December 17, 2020

PLUS: What are the memes of the year?
December 17, 2020
The Hustle
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We have been waiting a few years for a combination of words to give us as many chills as “human centipede” does.

Well, it’s here: “unskippable double YouTube ads”… which seem to be on every video now, and win the award for worst invention of 2020.

The Big Idea

Europe is dropping the hammer on Big Tech (again)

The largest tech players in Europe — like SAP ($148B), Spotify ($60B), Adyen ($57B) — are minnows compared to competitors in:

  • America: Apple, Amazon, Microsoft, Alphabet, and Facebook have market caps between $780B and $2.2T (with a ‘T’)
  • China: Tencent and Alibaba are both worth $700B+

The Old Continent may lack punch on the business side — but it  compensates with a BIG hammer when it comes to regulation. And on Tuesday, the European Commission came out swinging.

2 proposed bills are meant to regulate tech

Here’s what’s on the table, per the Wall Street Journal:

  • The Digital Services Act would require tech players that reach 10% of the EU’s population to “actively look for and mitigate risks” available on their platform
  • The Digital Markets Act would ban behavior by “gatekeeper” tech companies (such as forced bundling of services) and create obligations to smaller competitors (such as price transparency)

The UK is rolling out similar legislation. And while no names were named, the EU’s “gatekeeper” cutoffs (e.g., minimum sales of ~$8B and market cap of ~$80B) sure make it look like it’s going after Big Tech.

The source of Europe’s influence: its massive economy

Countries in the European Union have a combined population of ~450m people and a GDP of ~$20T, right up there with China and the US.

In what is known as the “Brussels Effect” — which nods to the city where EU rules are made — Europe’s size allows it to create laws that the biggest corporations around the world must follow to access its market.

The last major hit was the General Data Protection Regulation (GDPR) privacy law, which has dished out $200m+ in fines for 2020.

The kicker for the new bills are the potential penalties

Violators can be hit with:

  • Fines of 6% to 10% of annual worldwide revenue (10% of Apple’s revenue is $25B+, which is a touch more than the ~$550k Twitter just got fined for violating GDPR)
  • Breakup of tech companies for abusive behavior

In one win for tech, the liability shield for content that passes through a platform would remain.

While there’s no guarantee the bills will get passed, Europe’s antitrust czar Margrethe Vestager sure had some ominous words: “We need to make rules that can bring order into chaos.”

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Snippets
  • People are getting sick of Apple: Its new privacy policy will make ad targeting harder and — potentially — more difficult for small businesses to compete online. In response, Facebook took out full page ads criticizing Apple and in support of “small businesses everywhere”.
  • Twitter must look at TikTok and weep. It was in social videos years ago. It bought Vine in 2012, then shut it down in 2016. It bought Periscope in 2015, and just announced it will close shop in March 2021. Fleets, though!
  • Smells like springtime: 2 rival Canadian weed makers (Aphria, Tilray) will join forces to create the world’s largest cannabis maker by sales. They smell the green and want to give investors high returns.
  • “Well, what if Facebook does it?” The popular investor question has its latest example: Zuck just launched a local services marketplace to take on Angie’s List.
  • “Well, what if Amazon does it?” Jeff Bezos has mulled building a Shopify competitor.
  • Led by Texas, 9 states are suing Google’s parent Alphabet for rigging digital ad markets along with… Facebook (jeez, get out of our Snippets Zucky McBerg!).
  • Shoe reselling platform StockX just raised $275m at a $2.8B valuation… it might be prepping for an IPO.
  • Bitcoin topped $20k for the first time, reaching an all-time high. Next up: Mars.
 
Get Up
Ro app screenshot

Ro started with erectile dysfunction drugs. Now it’s a $1.5B telehealth powerhouse.

In building its Everything Store empire, Amazon started with one product: books.

Ro — a $1.5B digital health powerhouse that offers a telehealth platform from doctor appointments to pharmaceuticals delivery — was also founded with only one (slightly different) product: erectile dysfunction drugs.

Since its 2017 launch, Ro has added generic drug delivery for women’s health (Rory), smoking cessation (Zero), and weight loss (Previty).

Of all the money poured into telehealth this year…

… Ro received the single biggest funding round, $200m in July, according to Pitchbook data cited by Forbes.

Ro recently took some of that sweet dinero and acquired Workpath, a software platform that facilitates in-home visits.

Workpath started as a fleet of phlebotomists (people who draw blood) but pivoted once the startup realized its real secret sauce was its in-home scheduling and dispatch technology.

The generic drug industry has few barriers to entry

In fact, one of Ro’s direct competitors — Hims (profiled by Trends) — has plans to go public via a SPAC. Unlike other telehealth players, these businesses are “cash pay” and don’t accept insurance per Forbes.

Workpath brings a potential moat to Ro’s digital health business, coming with 16 employees and the experience of booking 100k in-person visits, a tougher logistical challenge than shipping pills.

The new revenue stream can’t happen fast enough for Ro, especially as Big Dick Bezos Amazon just added a new product to its Everything Store: a pharmacy.

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SPONSORED

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Uber for Business (excuse the pun) means business.

You know of Uber as a way to request rides and order meals from restaurants you love, but did you know about Uber’s platform designed specifically for businesses?

The Uber for Business platform is seeing big success thanks to features and products like auto-expensing rides and meals, and vouchers for Uber Eats.

*Furiously forwards this ad to Sam*

Companies can sign up for Uber for Business and let employees order lunch for delivery at home or the office with Uber Eats; make sure everyone has a stress-free ride to work; or offer a free meal to customers as a way to say thanks.

Organizations can manage rides and meals through one simple, intuitive dashboard that makes life easy for your company (and keeps things manageable, so nobody goes and blows $600 on prime rib delivery every Tuesday). 

This program is growing, but signing up is still free — so take advantage while it lasts and join Uber for Business here:

Try Uber for Business →
Meme-tastic

What are the memes of the year?

Buzzfeed rolled out its annual “memes of the year” list and there are some doozies in there.

Befitting the rise of video app TikTok, the top 2 memes are from the social video app:

  1. A video of a dancing llama called “Mi Pan
  2. DoggFace, AKA Skateboarding cranberry-drinking and Fleetwood Mac “Dreams” lip-synching guy

A few others we love:

The Dancing Pallbearers

A 2017 BBC video of dancing pallbearers cut to some crazy techno tunes has become a ubiquitous way to troll someone after they get served on the internet.

Everything is a Cake

Some dark wizards bakers on the internet decided to make everyday objects — basically everything that should not be a cake — into cakes.

The Dolly Parton Challenge

In the halcyon days of January, singing legend Dolly Parton posted a 4-panel Instagram showing the different profile pictures she would “use” for LinkedIn, Facebook, Instagram, and Tinder. #TheDollyPartonChallenge took off, with Martha Stewart dropping a particularly funny one.

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COVID relief
lil wayne money gif

Source: Giphy

Is $900B of stimulus on the way?

There are 2 upcoming dates of note:

  • Saturday, December 19: The government will shut down for the holidays.
  • Saturday, December 26: 12m Americans will lose unemployment benefits if the government doesn’t get a COVID deal done.

Per CNBC, the urgency of these dates is pushing legislators to get a $900B stimulus completed in the next few days:

  • What’s in: Direct payments to citizens, enhanced federal unemployment benefits, more PPP small business loans as well as  funds for COVID testing and vaccine distribution
  • What’s out: Liability protections for businesses or aid to state and local governments

There will likely be more stimulus under the new administration, but to keep a 3rd important date (December 25) positive for many families: This deal needs to get done.

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Big Tech Envy of the Day
Quaero logo

If the EU is trying to hide Quaero, it’s doing a good job… this is the only pic we could find (Source: CDRinfo)

Europe so badly wants its own tech giant that France and Germany tried to launch — prepare for laughter — their own search engine in the mid-2000s.

The only thing worse than the idea was the name: Quaero, the Latin word for “I seek” (there is literally no reason why you should have three vowels in a row).

One reason given for Europe’s failure to create its own Amazon or Facebook is the language barrier. As compared to America’s 50 states, the EU’s 27 member countries don’t share a common language.

This, however, didn’t stop France and Germany from creating what is probably the world’s top airplane maker now: Airbus.

The magic did not repeat itself with Quaero, which provided text-based search but touted a secret sauce of image-based search.

Non. Nien.

In its most lasting legacy, Quaero makes “Bing” look like the Latin word for “Google.”

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