Do We Need The Metaverse? — With Nick Clegg

Nick Clegg is the president for global affairs at Meta and former deputy prime minister of the UK. He joins Big Technology Podcast to discuss his company's vision for the Metaverse, how it should be governed, and whether we actually need it. Stick around for the second half where we speak about Meta's app store fees, whether the company should instead focus on winning over younger users, and the ethics of its lobbying effort. This podcast was recorded live from Davos during the World Economic Forum's annual meeting. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

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• 1:03Speaker 01

  LinkedIn Presents.

• 1:29Alex Kantrowitz?

  Hello and welcome to the Big Technology Podcast, a show for cool-headed nuanced conversations of the tech world and beyond. We are here at Davos in association with Unfinished and the Web3 Foundation. We're going to start big, and I'm about to introduce our guests in a moment. But just to let you know that we have four conversations coming up after this one. Gavin Wood, the co-founder of Ethereum. Vivian Schiller, the executive director at the Aspen Institute, here in the audience today, which is awesome. Nick Thompson, CEO of Atlantic and professor Eric Bernyovson, who's the author of The Second Machine Age and does great work at Stanford. And now for our guests today. Joining us today is Nick Clegg, the president of global affairs at Meta and the former deputy prime minister at the UK. Nick, how are you? I'm all right. How are you? I'm doing well. I'm excited to speak with you about all things Meta. But first, I got to start with this.

• 2:14Alex Kantrowitz?

  You must be thrilled that Elon Musk is trying to buy Twitter. I mean, for all the scrutiny that Facebook gets, and I'm trying to put this delicately, it must be like a really nice distraction.

• 2:25Speaker 01

  I'm not sure that was his plan, or certainly not ours, but I suppose you're right in saying that it does reinforce, given that he has very deliberately sought to kind of open a debate around free expression versus content moderation, it does reinforce something which sort of I live and breathe every day, which is, it's difficult. It's really difficult to draw these lines in a way that, you know, enjoys consensus. And in a sense, it just kind of reinforces the kind of push-you-pull-me quality of the debate around free expression versus content moderation, particularly in the United States, where, you know better than I do, like, half the country thinks that Silicon Valley companies take down too

• 3:10Speaker 01

  much content, and the other half thinks they don't take it down enough. And so to that extent, I think it's kind of, sort of, yeah, it's shone a spotlight, not even so much on us, or on Twitter, or even on Elon Musk, just on, this is a kind of difficult, living and breathing debate about human speech, and where are the limits, and where the limits should be, and who should set them.

• 3:29Alex Kantrowitz?

  That's right. And luckily for you guys, I don't think there's going to be any Musk figure coming in to try to take over, so.

• 3:35Speaker 01

  Doubt it. Doubt it.

• 3:37Alex Kantrowitz?

  So, let's talk about the metaverse. You've been at it, blogging on Medium, so, welcome to the club. And you had a long piece that you published about the metaverse. Now, I think with conversations like this, conversations about the metaverse, conversations about Web 3, NFTs, DAOs, whatever it is, all the hot topics in tech today, one of the consistent things is that no one really knows what we're talking about when we say these words. You know, I had a selection of comments from your competitors that I got to read through about, you know, their perspective on what the metaverse means. But here's one for Dave Limp, who runs hardware at Amazon. He said, "If I asked a few hundred people what they thought the metaverse was, we'd get 205 different answers." What's your answer?

• 4:20Speaker 01

  So the first thing to say is it's not one thing, it's a whole new computing. Here we go, we're already. No, but no, but the reason you will get different answers is because like if you ask someone, what is the internet? I mean, you'll have lots of quite sort of elastic definitions. A lot of things happen in and on the internet. It's a similar, it's a new computing platform. It is, in effect, you're trying to kind of build a sort of new version of the internet almost from the foundations upwards. I, I think what it, I think the, I think it's perhaps therefore easy to describe how it is a relatively, I mean, it's both revolutionary in one sense and sounds quite sort of sci-fi when people describe it, but it's also quite a compelling and almost logical evolution of where we've come from. If you think about the way we've

• 5:05Speaker 01

  leapt from desktops to laptops and laptops to phones, there's no law of nature that says we're going to carry on holding phones in our clammy hands forever. The idea that in hardware terms, we might move to something which we put on the perch on the bridge of our nose, maybe with some computing power around our, our wrist or in our, you know, in, in, in our pockets is not, you know, I think, I think you need to sort of escape this idea that the phone is the last iteration by which we, by which we enter into the online world. And equally, if you look at the content that we have tended to rely upon, we started with texts, then we moved to photos, and now it's kind of very much videos. I mean, Facebook, about 50% of Facebook now is video. Look at the amazing success of TikTok using

• 5:48Speaker 01

  these short form video forms, and all of them are moving to, inexorably, in one direction, which is making the way we communicate more and more lifelike, more and more embodied. You and I, I'm looking, I'm picking up thousands of signals from you, you're picking up thousands of signals as you're looking at me, you're looking at my gesticulations, my body language. You know, the metaverse offers this tantalizing prospect of a means of communication where it's not just what we say or what we film, but it's also how we are as embodied, you know, beings that also becomes, you know, the way in which we communicate. And I think that, I guess terrifically exciting, that sense of presence, which in a sense has increased

• 6:33Speaker 01

  with each of those iterations and could really manifest itself more fully in the metaverse.

• 6:40Speaker 01

  I don't find that I don't find that imprecise or vague. It's it's sometimes difficult to visualize, but the more that the technology matures. I I've been holding my weekly team meetings, not least because people are distributed around the world for close to a year now in in Horizon workrooms. And, okay, we're all we're all sort of cartoon avatars of ourselves. I curiously look significantly lighter and about 20 years younger than I really, really, really am. So we all choose rather flattering avatars of ourselves. But it's amazing sense of presence being in that virtual space. I I notice, for instance, my voice relaxes so much more when I am speaking to people

• 7:25Speaker 01

  in the metaverse in those formats than when I'm slightly straining my voice to speak to people on those passport photograph rows, you know, on a flat screen, you know, on Zoom or whatever. So anyway, that that's a thumbnail sketch, not a very brief one, but one which I hope nonetheless gets a flavor of the way we at Meta think about it.

• 7:43Alex Kantrowitz?

  Okay, I hear you. So technology that allows for presence between human beings, something like virtual reality, augmented reality.

• 7:49Speaker 01

  Well, eventually, the technology melts away. I think that's the that's the aspiration.

• 7:52Alex Kantrowitz?

  Brain implants, we could go that way. But I want to your example is really telling because, of course, if you're working at a multinational company like Meta, you're going to have colleagues in different countries and an experience like being in the metaverse with them is awesome. I wonder about the rest of the population, though, especially people who are like, yeah, who aren't working in, you know, white collar jobs are born to affluent. So I've read this really interesting Atlantic story that said roughly three in four American, it's about Americans, I know we're, you know, we're outside of the US right now, but I think it's probably instructive for what goes on in most of the world. Roughly three in four American adults live within 30 30 miles of their nearest parent or an adult child. And only 7% have their nearest relative 500 or more miles away.

• 8:37Alex Kantrowitz?

  So do you think that there could be a bit of a solving the wrong problem situation here? Because most people do want to spend their time, like the idea of presence, they get that with the people that are close to them and the people that are close to them are physically close to them. You know, it's only when we get into places like we're working in multinational corporations where the Zoom meeting or, you know, let's FaceTime with my mom becomes important.

• 9:03Speaker 01

  I'm not sure if I agree with that. If you just say, I mean, think. Just imagine what it could do in the classroom. You could take a class of 12-year-olds to walk, in the metaverse, in ancient Rome, as you're teaching them about ancient Rome, medical students. A surgeon could teach medical students how to perform surgery in a much, much more direct, lifelike, and embodied way than we do at the moment. I think the applications are much more diverse than... I mean, think of the creative possibilities. And we see, by the way, in the early use, by the early adopters of our technologies, how particularly younger people are using it, even though many of them will use it primarily

• 9:48Speaker 01

  for gaming purposes, that quite quickly, they're using it for social purposes, almost autonomously. We're not prompting them to do so. So I think there are lots of different ways in which people might use these technologies, which don't just rely on whether you are physically distant from your kith and kin. I mean, think what the effect it could have on that wasteful, draining, ecologically damaging mass habit of commuting to offices. Why do so many billions of human beings commute and waste one, two, three hours a day commuting into offices to sit in serried rows on desks, when I kind of think in the future, quite

• 10:31Speaker 01

  a lot, not everybody, certainly for those who choose to rather than compelled to, would be able to work just as comfortably, just as effectively, with just as much sense of presence, one to the other, through this technology?

• 10:44Alex Kantrowitz?

  Can't you just do that through Zoom, though?

• 10:47Speaker 01

  Yeah.

• 10:48Alex Kantrowitz?

  But you're saying this is better than Zoom?

• 10:49Speaker 01

  Our assertion is that what people will always seek is a form of communication which is more embodied, where the presence is greater, where the sense of really being there with someone else, even if you're not there physically, will always be more rich, more enjoyable, more fulfilling, and so on and so forth. But in terms of the barriers, one thing, you didn't mention this, but one thing which I do accept is a sort of built-in barrier. And remember, we're a company that... Is sort of moving from being a social media app company to being a company that now will produce hardware. We haven't really been a hardware company before. And also being a social media company to being a company that will also design its own operating system. You know, the internet basically is dominated by two operating systems, iOS and Android.

• 11:34Speaker 01

  We're going to be developing our own operating systems, as I guess the other major players will as well. But whenever you have hardware, that of course is in some sense a kind of barrier because you've got to buy it. Now, we don't, our business model is not, we're not aiming to, we're not aiming to spin a great markup on, on, on the hardware. We want to keep the cost of the hardware as low as possible. We can't give them away. We're not, you know, we're not a charity either, so we have to, we have to make sure that we can cover the costs of manufacturing them. But I do accept that getting the hardware into sufficient numbers of people's hands, particularly those on lower incomes, is always a, always a challenge. But, you know, it was the same with the whole mobile telephone revolution and, and, you

• 12:19Speaker 01

  know, that hardware has become pretty prevalent. But that is one additional barrier which we as a company have ever had before.

• 12:26Alex Kantrowitz?

  Right, and you're working on that now.

• 12:27Speaker 01

  Yeah.

• 12:28Alex Kantrowitz?

  But it's interesting because, okay, so you talk about like getting into rooms with, with your coworkers. You talked about schools. I know you guys are talking about medical issues. Facebook's, or we can call it Meta now, still Facebook. Facebook is the social network. And, and it's, you, you've built these social experiences. Is it possible that what you're really building is an enterprise product and not a consumer product? And that's exactly what happened with Google Glass. And of course, it was early for its time, but people realized that, you know, this, this experience was actually much better if we used it in factories, for instance. I know you have differences from Google Glass, but it's interesting to see this shift.

• 13:05Speaker 01

  Yeah, it's not, it's not our intention. I, I, it's not to say there won't be enterprise applications. I was in Munich just a few weeks ago at BMW's research centre. They were, actually, as it happens, they weren't using our hardware or stuff. But it was very interesting to see how much they use AR and VR technologies already in the design processes for their cars. It was very impressive to see. So clearly, there are enterprise applications for this technology generically. It's not where we think our expertise lies. I mean, we think what we're good at is precisely based on finding new and enriching and inspiring and enjoyable ways for people to connect with each other.

• 13:46Speaker 01

  You know, you may have heard Mark Zuckerberg talk himself when he talked about, when he founded Facebook, that you could go on the internet to find a book, you could go on the internet to find an idea, you could go on the internet to find a holiday. The one thing you couldn't go on the internet to do is find the most important thing of all, which is other human beings. And that's very much the spirit that we bring to this, and it's very much the skills that we will bring to this as well. And if you look at the experience we've built, Horizon Worlds, it is all rooted in the idea of social interaction. But I, so I don't think the enterprise application is the primary motive. It's certainly one, though, that I think will occur, of course, and others might excel in that, in a way that, you know, appeals more to their interests or their skills.

• 14:28Alex Kantrowitz?

  So you're building an operating system with Oculus and Horizon. You talked a little bit about Apple, and Meta has some clear perspectives on what Apple's doing with its App Store. Are you going to follow the same pattern? I'm talking about being restrictive in terms of, like, I guess, governing your App Store with a heavy hand, charging big fees?

• 14:51Speaker 01

  Right. We will charge fees. They, you know, they won't be the same, but so to that extent, it will be new for us to, you know, run a sort of App Store-style operation.

• 15:05Speaker 01

  I think here's the thing, and I'm not, honestly, I don't want to be facetious when talking about Apple or other companies, but if you look at the way in which Apple is a devastatingly successful company, the way they've sort of vertically integrated their stack, they've got the operating system, they've got the hardware, they've increasingly got the services, the kind of centrifugal temptation or incentive for people just to remain in that kind of Apple funnel is so overwhelming now. And I do think that there is a slight danger that sort of competitive animal spirits being what they are, if we

• 15:46Speaker 01

  allow the governance of the metaverse purely up to the kind of private sector to slug it out, I do think there is a bit of a risk that, much though, much in the way that we talk about the splinterverse, sorry, the splinternet in the terms of the fragmentation of the internet as we know it today, I think there is a bit of a risk that you'll get a splinterverse and you'll get a sort of vertically integrated Microsoft metaverse and a vertically integrated Apple metaverse and a Google one and then a meta metaverse. And that from a user point of view, the ability to move seamlessly from one to the other will be inhibited. And I think that would be a great, great shame. And so we all need to work on the whole web of standards and interoperable arrangements and licensing arrangements

• 16:30Speaker 01

  and all the rest of it, which have grown up in a slightly heegle-de-piggledy way in the current internet to allow the user not to feel they're locked into these kind of silos. I do think that is a, it's probably in governance terms, the bit that I think is most deserving of real thought.

• 16:48Alex Kantrowitz?

  Of course, interoperability, you know, it's something that you've talked about. But I want to get a firm answer from you on the Apple thing, because... The big discussion about Apple has been the 30% fees in the App Store. You mentioned you're gonna charge fees. I always thought after hearing, you know, from people inside Facebook about the way that Apple was charging, that those fees would inevitably be less, but there was a report that came out a few months ago that said that Meta is gonna take, has been taking 47.5% on some transactions when it comes to NFTs. So it's like a hardware platform fee of 30% of sales through the Meta Quest Store and then Horizon Worlds will charge a 17.5% fee. You know, people have been talking about that for NFTs and one person I saw comment on it was like,

• 17:33Alex Kantrowitz?

  "Someone ought to tell Meta that after the IRS is done, I'm not gonna have that amount of money to pay them." Why 47.5%? I mean, how could that possibly be?

• 17:43Speaker 01

  Well firstly, as I said earlier, we're not, we're not looking to make money off the, off the hardware, off the device. So it's quite a different approach than, than Apple has taken where they, where they clearly, you know, extract a significant margin on, on the device. Yes, we're charging fees, but remember Horizon Worlds will be, will be available through lots of other routes. So the, I think it's the 17% that Horizon Worlds will, will charge on Horizon Worlds is not, it, it, I mean, in a sense what you're, I get it. You're adding together the App Store charge on Oculus with Horizon Worlds. But of course, we envisage Horizon Worlds being available in, you know, through so many different other, other routes.

• 18:26Speaker 01

  And, and so the same won't apply. So it's, I'm not sure if it's comparing, you know, apples with apples and pairs with pairs. I think it's mixing these things. But yeah, we're, we're quite open about the fact that we, we don't want to, we don't, we're not trying to extract great margins off, off the hardware. We do want to be transparent about if you, if you're, you know, generating value and creating presence on Horizon Worlds. We want to be very open about what the charges are. And they aren't just charges on top of Oculus, because as I say, they'll be available through 2D means as well. So yeah, look.

• 19:05Speaker 01

  We're not, you know, we have to be open about that. We're not, we're not hiding those, those rates, those fees, but I don't think they are remotely similar to the Apple approach, which is a very successful business model. It's not the one we're following.

• 19:21Alex Kantrowitz?

  Yeah, I mean, it's not similar because it's cost more money. I mean, wouldn't it make sense just to commit to charge like, let's say, a flat 15% no matter whenever you go through anything that Meta builds?

• 19:31Speaker 01

  Well, we've chosen not to. And as I say, if we could, we could slice and dice this in different ways. We could try and put more margin on the hardware. The moment we decide not to do that for the reasons I described earlier, because we think we've got a huge incentive to get hardware into the hands of people at the lowest possible cost, then you have a knock on effect. And look, we're pouring, I mean, I'd love to, I mean, people might think that we're like, you know, we're a charity which can just give away this stuff. We can't. We have to try and work out a business model that's sustainable. We're pouring billions of dollars into this technology and we'll continue to do so for years before it makes a meaningful return for us. So we kind of have to develop a, you know, a balance between where we think a value is created for developers and creators

• 20:13Speaker 01

  on our platform and what would be a reasonable fee to ask of them and be very open about that from the outset. That's what we've done.

• 20:21Alex Kantrowitz?

  Okay. So, speaking of the investment that you're making in Oculus, does the, so I think last summer, Facebook was valued at a trillion dollars. That's about, it's about half right now, given the market turned down. Do you make different decisions investing in products like Oculus when you're worth 500 billion, which isn't bad, versus a trillion? I mean, there are hiring freezes, from my understanding, in multiple departments throughout Facebook. I don't think that exists in Oculus. Can people expect to see the same investment, given the state of the economy right now?

• 20:58Speaker 01

  I think that one of the advantages of having a founder-led company is that you can plan for the long term and you can sort of ride out these wild gyrations in the markets a bit more strategically than than a company that has to be driven by quarter-by-quarter performance. So we're cutting our cloth, as you'd expect, prudently in response to market conditions. We're operating possibly in the most competitive environment that we ever have as a company. So I kind of think that's what it would be very odd if we didn't. And that, of course, has an effect on, I mean, we're not, you know, headcount is growing. It's just not growing as fast as it might do otherwise.

• 21:41Speaker 01

  So we're still going to be employing more people at the end of this year than we did at the end of last year. So it's still growing. It's just we're being sensible about trying to kind of slow the rate of increase where we think that that is consistent with our product roadmap. And in answer to your question, will that materially affect the momentum towards our investment in these metaverse technologies? No. I mean, our aim is still to square the circle and still maintain the same momentum. We've got this very exciting new headset. It's a sort of higher-end headset that we're releasing later this year, which will be

• 22:23Speaker 01

  a significant sort of advanced step in displaying our mixed and augmented reality capacities, which we've invested in a lot. So, no, we want to keep that up, but, you know, we're doing what any business does when market conditions change. You cut your cloth accordingly. That's what we've done.

• 22:41Alex Kantrowitz?

  Nick Legg is with us. He's the President of Global Affairs at Meta, former UK Deputy Prime Minister. We'll be back right after this on Big Technology Podcast. This episode is brought to you by Avpoint. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data. And most teams have no single way to see it, secure it, and prove it's under control. That's exactly what Avpoint does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate. Your data, your cloud, and the agents acting on your behalf.

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• 24:56Alex Kantrowitz?

  And we're back here on Big Technology Podcast with Nick Clegg, former UK Deputy Prime Minister and current President for Global Affairs at Facebook. Nick, great having you here. Actually, we're here at Davos, we kind of spoke on the way up here about about power. And you know, it's kind of interesting hearing your perspective on what it's like coming here as a representative of Facebook, right? We're here where some of the world's top officials are gathered, some of the world's top business leaders. So you've obviously come, you know, from the government perspective in the UK, and now you're here from a corporate perspective with Meta. How is it different?

• 25:35Speaker 01

  It's very different. It's, I mean, the world of sort of Harry Potter world of Westminster of sort of, you know, people calling each other, you know, I couldn't even be called Nick Clegg in the House of Commons. I had to be referred to as the Right Honourable Member for Sheffield Hallam. I mean, it's just like a language which is like stuck in the 19th century. The building is about to collapse under the weight of its own contradictions. It's, you know, it's such a sort of antiquated arrangement. Of course, that compared to the sort of gleaming steel and glass constructions at Empires and Silicon Valley is very different.

• 26:16Speaker 01

  The one similarity, I guess, is just given the sheer scale of Meta and our apps used by, you know, three billion odd people, given all the controversies which of course always erupt around, you're dealing with human speech and all those different manifestations, you know, good, bad, beautiful and ugly. The sort of velocity and variety of issues that certainly cross my desk feel a little analogous to the velocity and variety of issues that I encountered when I was in government. But I often hear people say, oh, you know, these big tech companies, they're as powerful as governments. That's not true at all. I think it's a totally overused sort of analogy, which really doesn't bear any scrutiny at all. They're not like governments at all. Governments have

• 27:00Speaker 01

  Much more direct, they don't, governments decide whether you go to war or not, they decide whether your taxes go up or down, or they decide whether your local hospital gets more money or less, they decide what your curriculum your kid is taught, you they, you know, they decide how your elderly parents looked after in a social care home. It's much, much, much more direct influence over people's lives than even the most powerful social media companies. I do think this, this sort of well-worn, off-repeated analogy between these big social media companies in government is, is, it's a great, it's a great kind of throwaway thing to say in a, in a newspaper column, but it doesn't, in my experience, bear much relation to the reality.

• 27:37Alex Kantrowitz?

  Well, you don't have an army, but you do have influence.

• 27:40Speaker 01

  You have influence, but, but, you know, at the end of the day, people will use Facebook, Instagram, Messenger, WhatsApp in the way that they want, when they want, how they want or not. They're not, you know, you, with government, if you're in government, you've got a pretty solemn set of responsibilities to defend the nation, to keep people safe, to educate children, to protect public health. It's a much, much more diver- I, I just, just because three billion people use a product doesn't mean, doesn't mean that you're administering sort of government decisions and how they lead their everyday lives in a way that governments do. So I, I mean, maybe because I'm in the unusual position of, I suppose I'm, yeah, I suppose, thinking about it, I'm probably the more, the sort of senior ex-politician who've gone into an executive position in a big Silicon Valley company.

• 28:25Speaker 01

  I just think it's a, I just think it's a nice glib kind of comparison, which just doesn't really tell you much in practice at all, is my, is my view, but.

• 28:33Alex Kantrowitz?

  So when you speak to the, you know, the people that you used to work with on the government side, you're here talking about the metaverse, I mean, we've seen some of these discussions. Do you think that they know what, what, I mean, I guess a lot of us don't know what the metaverse means, but do, how, how are these conversations going? And do you think they are, you know, tackling these issues and prepared, I mean, it probably is too early for regulation, but like, are they wrapping their head around the way that this stuff can change?

• 28:55Speaker 01

  Well, it's interesting you say that. One of the reasons, and forgive me it was so long, and thank you for reading it, but for those of you who've waded through it. We'll link it in the show notes, yeah. For doing so, but I hope you thought it was worth it. One of the reasons I wrote that, and one of the reasons I'm talking to a lot of people here about it, is I think one of the things that clearly with hindsight, went wrong is too strong a way of putting it, because I don't think it was deliberate, but we clearly, as a sort of society, I'm talking in very grand terms now, you had this technology erupt 10, 15 years ago, more, particularly in social media, and in a sense we've been retrofitting societal norms and standards and guardrails and limits on them ever since. You know, the EU has just passed

• 29:39Speaker 01

  the DMA and the DSA. Logically, the DMA and the DSA should have been in place 12 years ago, not now. And I think oddly, given that we've got a lot of time, you know, that these metaverse technologies, it's still very, very early days. It's going to take 10, 15 years for this technology to, you know, to come to fruition. So I hope that this time round, we actually have the opportunity, if we can have a kind of grown-up conversation about some of the fundamental foundational concepts of what is the metaverse, what is it not, who's responsible for what, at what level of the kind of stack, where do the responsibilities of the companies lie, or the individuals, or the users, or governments, regulators, and so on, who sets the rules on interoperability. If you can have those discussions now, in

• 30:23Speaker 01

  parallel with the kind of flywheel of engineering and technological investment, hopefully, we can look back in 20 years' time and say, oh, well, this time round, we avoided this sort of violent mood swing from tech euphoria and sort of tech utopianism to sort of tech pessimism, which we've seen, which we've seen occur over the last decade, where, you know, companies like Facebook were held 10 years ago to be responsible for everything that was good and great and shiny and bright, and people like Mark Zuckerberg were held aloft, and they could do no wrong, they walked on water, and now literally anything that goes wrong, from an election outcome you don't like to, you know, youngsters are unhappy, it's all got to be because of some mysterious and nefarious algorithm. It's kind of swung, and of course neither are true. Neither extreme optimism nor extreme pessimism are true.

• 31:07Speaker 01

  It's always, the truth has always lies somewhere in between. My hope, and this is where I hope to play a modest role, is if you can sort of... Sort of goad and encourage the policymakers and the regulator staff early thinking about this, maybe we can talk about governance and rules and so on at the same time as the technology develops, rather than, in a sense, sort of, you know, add them as sort of seatbelts, you know, later after the technology has already taken root.

• 31:38Alex Kantrowitz?

  Yeah, it's interesting though, because like I'm listening to, reading your post, and the names I see coming together to try to get regulation on this pass are companies like Meta and Apple and Microsoft, Google. At what point do the most powerful companies coming together to push regulation actually end up entrenching them more than it does opening up room for other competition?

• 32:02Speaker 01

  That's always the risk. You always got to be very skeptical when big companies say, oh, you know, we like, we want new rules of the game.

• 32:07Alex Kantrowitz?

  And Facebook doesn't really play, you know, you guys take some swings when you get regulated against, I'm talking about like the Australia situation, when they wanted to charge Facebook for news and the company shut news down, so.

• 32:20Speaker 01

  Well, quite the characterization, I'd say. We were just on that one.

• 32:23Alex Kantrowitz?

  Not just news, yeah.

• 32:24Speaker 01

  Well, just on that one, we were being asked to pay, in the original conception of those rules, potentially uncapped amounts of money, literally limitless amounts of money, to publishers who were posting their content on our platforms to reach their users, where all the value goes from us, in a sense, to them. And we were, so we quite, we had no, of course, it's not something I voluntarily like to do. You don't like to have a great big argument like that. But it was just, I don't think any business would have put up with a proposition where we're just basically being asked to provide an uncapped subsidy to another industry, particularly an industry, in this case, the publishing industry, who derive all the value from us. But anyway, that's, I put that aside. No, no, no, look,

• 33:08Speaker 01

  I think your initial instinct to be skeptical when big companies say that, absolutely, because of course regulatory interventions can become a barrier to market entry and so on. And look, I'll be clear, I'm not here saying, straining at the bit, saying, oh gosh, Parliament should rush to make laws and rules about the metaverse. I think it's too early for that. I just think that the more you can have a grown-up conversation... With academics, researchers, with other parts of the industry, large and small, with online harms experts and others, get everybody in the same room with regulators and say, "Look, this is new technology, it's going to happen one way or another. We don't exactly know how it's going to play out, but here are some of the early foundational design questions we need to think about."

• 33:52Speaker 01

  I kind of just intuitively think that has to help us navigate all of this better than the kind of wild mood swings that seem to me, at least, have seemed to somewhat disfigure the societal debate around technology over the last 10 years or so.

• 34:08Alex Kantrowitz?

  So let's talk about the way that Facebook does go about, I keep saying Facebook, this name change, man. Okay, so let's talk about the ways that Meta goes about this regulation. There was an article in the Washington Post last week about a group called American Edge that got all of its seed money from Facebook, was millions of dollars, and they go out and they have local business people do op-eds or make statements, run ads, that seem to be supporting Facebook's positions, but never any disclosure that that's where the source of the money is coming from. And this has happened like all throughout this big tech debate. And I think that like, it's actually good, there are arguments to have D to C companies

• 34:51Alex Kantrowitz?

  or smaller businesses talk about how these products are helpful. However, they should, if they're being funded, if the ad campaigns are being funded by organizations that get all their money from Meta, there should be some disclosure, don't you think?

• 35:03Speaker 01

  Yeah, I'm surprised to hear you say that. I think there's full disclosure, I think we've never hidden the fact. I mean, by the way, I, I mean, I need to, I don't know which story you're referring to, but I mean, we've been totally open about the fact that American Edge, which is a constellation of experts and people saying, basically making the fundamental case that American technological success needs, you know, you shouldn't just take it for granted, and lawmakers need to think very hard about the effects of their decisions on American technological prowess, particularly compared to the strategic competitive threat from China. We've been very open about the fact that we supported that, financially supported it, they have as well. By the way, ask any of the numerous, numerous organizations who...

• 35:47Speaker 01

  Whose sole purpose in life is to criticize big tech, ask them where their funding comes from. Everybody is funded by some, yeah, exactly. And everyone just needs to be open about it. I don't, I don't think just because, I don't know which, there are lots and lots of these organizations and they're funded by so and so and so and so and so. They're perfectly entitled to get that funding and still make their case. And I think the American Edge project is entitled to do exactly the same.

• 36:07Alex Kantrowitz?

  I don't doubt that Meta has made its connections to American Edge clear. I think the question becomes what happens when these small business owners come out and they're doing an ad on behalf of American Edge and it says, you know, this ad has been funded by American Edge, but no one knows what American Edge is outside of us, like the people in this room, people listening. I'm sure people listening to the podcast don't even know and the broader population don't know. So don't, don't you think Meta should commit to when, when small business owners go out to make your case through organizations that receive funding from you, that they also disclose that there's funding coming from Meta?

• 36:44Speaker 01

  Well, I, I, I mean, the answer is I don't know. I can't micromanage for you the relationship between American Edge, which is an organization funded by us, but runs, you know, runs its own operations. I mean, I'm assuming, of course, they, they disclose where their funding gets to when they're dealing with a lot of these local, um, local voices who are raising their own support for, for American, the American technology sector as a whole. But as I say, I kind of think it works all, all ways. I mean, you have, you know, you have local campaigns against big tech. I, you know, I'm assuming those organizations will say that they got money from this foundation or that foundation. Yeah, look, on the whole, I agree with you. I think there should be, and we've certainly

• 37:27Speaker 01

  got no incentive at all to be secretive about this. Why should we be? I think we're actually very pleased with the fact that people want to raise their voice and we want to support that, want to raise their voice about American technology and its role in society.

• 37:39Alex Kantrowitz?

  Right. But again, speaking of the power, if the money's going, I mean, I know you don't want to micromanage each one of these organizations, but if the money is coming to American Edge from a place like Meta, you probably have more, you know, influence over that organization.

• 37:53Speaker 01

  Yeah, we wouldn't, we wouldn't fund it if we didn't think what they did was something which we agree with.

• 37:56Alex Kantrowitz?

  So it couldn't just be like, hey, guys.

• 37:57Speaker 01

  Yeah, but I don't think, I mean, I will check, but I, we, I really don't think we have ever remotely

• 38:02Alex Kantrowitz?

  Right.

• 38:03Speaker 01

  brushed this under the carpet.

• 38:04Alex Kantrowitz?

  Yeah.

• 38:04Speaker 01

  Why would we? And I actually, I strongly suspect and hope that we couldn't and shouldn't that, you know, it's part of our arrangements that you have to be open about this.

• 38:12Alex Kantrowitz?

  Right. And I like the fact that you're saying that. And it would be good if we had this because when I first started big technology, I went and looked at a bunch of these op-eds that were being written. And the money didn't just come from Meta, it came from places like Alphabet as well. But oftentimes, there's like local op-eds in places like the KC Star that are trying to influence certain, you know, politicians. And then only after you dig through like four or five levels, do you get to

• 38:33Speaker 01

  Right.

• 38:33Alex Kantrowitz?

  the funder. Okay, but I won't harangue you about that anymore. So I also wanted to talk to you about, let's talk about teens. I, I wrote this book Always Day One, actually spoke to Mark for it. It was, you know, really interesting to hear about his perspective. And it's all about corporate reinvention, companies coming in as if it's their first day and building without regard for what the legacy product is. Now, obviously Meta's in the middle of that. You've got the name change. You have this big investment going into virtual reality. And at the same time, it seems like teens are, aren't seeing the same appeal, and young people aren't seeing the same appeal for products like

• 39:13Alex Kantrowitz?

  Facebook and Instagram as they did in the past. I'm curious if you think this is the right reinvention. And then, as a business, what does Meta need to do in order to get the energy going from young people in the way that it had been in the past?

• 39:27Speaker 01

  Um, I, I, I, I'm not sure if I entirely agree with that sort of thumbnail sketch. But dare I say it's a somewhat American-centric view of how people use.

• 39:37Alex Kantrowitz?

  Yeah.

• 39:37Speaker 01

  Well, no, no, but I mean, it's important this. Um, over 90% of the people who use our products are outside the US. And yet I find myself often asked questions as if the whole of social media is US. It's not. It's like, You know, less than 10% of our users, our US users, so if you look across the world, I don't actually think your characterization is entirely right. We've got a lot of young people using WhatsApp in increasing numbers, a lot of young people sort of use Instagram. We, of course, we constantly strive to be appealing to young adults in particular in Facebook and face fierce competition with that. But I, so we're not giving up, if you like, if that's what your implication.

• 40:19Alex Kantrowitz?

  No, no, I'm saying, I'm saying, yeah, I don't think you're giving up at all, but I want to know what's going on. Because actually, there have been, you know, I think either reports or Facebook itself has said that this is a big priority.

• 40:30Speaker 01

  Yeah, no, no, we've been very open about that, particularly when it comes to Facebook. We understand that, you know, it's a mature social media app now. There are other really attractive alternatives. TikTok is an astonishingly effective competitor for people's time and attention. It's the fastest growing social media app ever. Far, it's grown far faster than.

• 40:50Alex Kantrowitz?

  And people spend more time each day on TikTok.

• 40:53Speaker 01

  All that. So, you know, look, I mean, I'm kind of old fashioned in a way. I kind of think competition's a good thing. It kind of keeps you on your toes. It means you have to constantly iterate. We have to constantly ask ourselves why, you know, what are the attractions of these other apps? What can we do to make sure that we constantly iterate and innovate? And, you know, look at the way in which we have really now leaned into short-form video, which is clearly an extremely popular form of, you know, sharing content these days. And Reels is doing exceptionally well. We're not monetizing Reels as, you know, that'll take some time. So, you know, I think it's, it's never, it never stays still. It never stays still, both geographically and demographically and

• 41:38Speaker 01

  across the generations. We need to continue to.

• 41:43Speaker 01

  Offer improvements to our apps where we need to, to make sure they're appealing to younger people and not not just to more mature users. We do that across the piece. I think the other thing we're seeing, interestingly, is not exactly emerging, I'm putting it too strongly, but it is interesting to see the way in which messaging apps and social media apps, they're kind of blurring on the edges almost. It is interesting to see how messaging apps generally are being used for, it's going well beyond just the just sending a typed messaging message to another person. It's been used for payments, it's been used increasingly by businesses, it's been used by larger numbers of people. Look at the way Telegram is used by very large numbers of people. That's why we recently announced the expansion of WhatsApp

• 42:26Speaker 01

  communities, so church groups and youth groups and school groups can do that. So I think that's a really important evolution. We're spending a lot of time thinking about that. How can you retain the privacy and intimacy of messaging apps but also make them more sort of versatile for larger groups of people and for more business uses and not just personal communication uses? I think all of that is our areas where I think we are continue to be highly innovative.

• 42:51Alex Kantrowitz?

  And what do you think about Discord?

• 42:53Speaker 01

  Well, it's just, it's another app which is incredibly popular, as you know, and I even see this with my kids, you know, kids who will be gaming and they use Discord to message at the same time. You know, it's a very, very popular, very popular app. I saw look, I see Snap, I see TikTok, I see, you know, there's a lot of competition in this space. And, you know, we've been around for some time, longer than some of these other apps. All of them have their own virtues, all of them bring their own innovation. I think the key thing, and I think this is my own view, is one of the things that Mark Zuckerberg excels in, is to keep that sort of hunger, that appetite for trying something

• 43:35Speaker 01

  new, never to rest on your laurels. And I think it's a difficult balance. If you look at big companies, there's always this risk that big companies start resting on their laurels, they don't move as fast. And I think one of the interesting things about being a founder-led company is that hunger to continue to compete, to continue to innovate, to continue to be worried that you're going to be outflanked by new competitors, is very, it's very alive in, certainly in my experience over the last three and a half years in Meta. And I think that's a good thing.

• 44:02Alex Kantrowitz?

  Right, and he's the last of the bunch in big tech.

• 44:05Speaker 01

  I know, in a way, well, Elon Musk, yeah, well, Elon Musk.

• 44:08Alex Kantrowitz?

  Musk, I mean, we'll see what happens to Tesla stock.

• 44:11Speaker 01

  Okay, we'll see, but I mean, yeah, no, he's certainly, certainly, you know, if you think about jobs and Bezos and so on, you know, but one of the things I admire about Mark Zuckerberg is his, I mean, you could have, he could be forgiven to say, oh gosh, I've been doing this for quite a while now, and it's a, you know, it's a pretty full-on job, I'm gonna kind of slow down a bit. He remains as, as kind of adamant and, and sort of interested and intense about the, the job at hand as I think he was even, you know, several years ago.

• 44:40Alex Kantrowitz?

  Yep. Okay, I want to end on this. Have you heard of the Mappiness Project?

• 44:44Speaker 01

  No.

• 44:44Alex Kantrowitz?

  It's like a project that maps happiness, and there's a stat that they found of 27 leisure activities. Social media ranks dead last in how much happiness it brings. Why, why is that? Why do you think they found that?

• 44:57Speaker 01

  Um, well, without knowing anything about the study, I can't really give you a very, um, look, our research, I mean firstly, I doubt very much that, what is it, three billion odd people keep using our products because they want to be unhappy. I just, kind of, I just, sorry, just defies, I keep hearing these narratives about how ghastly it must be to use social media. Well, it's, can't, someone hasn't told those three billion people who continue to find great value and happiness and enjoyment out of it. I tell you what our research has shown, however, is that passive scrolling can be, can be a, you know, can be a more negative experience for people than using social media in a way that actually

• 45:37Speaker 01

  involves connecting with, with others. I think the act of connection, the act of communication does seem to have dramatic effect on people's sense of well-being. And so I do think it is incumbent upon us to, to find, find ways which people are encouraged, you know, to connect with other human beings and not just sort of passively scroll and kind of, you know, watch what other people are sort of doing. So that's certainly what our research has shown, and that's why we do spend as much time as we do to constantly find ways which people find it enriching and useful to, to connect to, to other people. But look, I, I, look, it's like everything else in life. Use it in moderation. Don't, don't, don't,

• 46:21Speaker 01

  you know, don't over-rely on it. Don't, don't make your life dependent on it. You know, it's like everything else in life. I think social media is incredibly, when well-used, and is incredibly enriching, enjoyable, and look...

• 46:33Speaker 01

  One of the things I find in my job is I speak to a lot of people who think that Facebook is all politics and news.

• 46:44Speaker 01

  And which, by the way, is true. I mean, Twitter is a lot of politics and news because it's an elite app. It's used by, what, 230 million people? It's tiny.

• 46:51Alex Kantrowitz?

  Less than that, yes.

• 46:52Speaker 01

  It's less. I mean, Snap is twice as big as Twitter. So Twitter is very, very small because it's used basically by politicians and journalists, and they have this sort of flywheel speaking about it. Facebook is completely different. The amount of politics on Facebook at the moment, in terms of the total content on news feed, it's about 3%. Because the vast majority of people go on Facebook, as I often say, for, you know, babies, barbecues, and bar mitzvahs.

• 47:11Alex Kantrowitz?

  But that's also an intentional decision by Facebook to limit the amount of political content.

• 47:15Speaker 01

  Yes, but for a very good reason because we know, because that's what people tell us, that they find that more meaningful, more fulfilling, more inspiring, and dare I say it, it makes them feel better about themselves, it makes them feel happier. So we don't want our apps to be flooded with angry political, polemic. It isn't. It isn't. The vast, vast, vast majority of it. And our job, of course, is to safeguard and to nurture that, the vast majority of that content which is fulfilling, fun, innocent, inspiring, and so useful, and of course, deal with a minority of stuff that is nefarious, that is bad, that is detrimental to people. That's our constant fight. But so much of the debate, certainly the debate that I'm exposed to with regulators and politicians, assumes that that minority is the majority. It really, really isn't.

• 48:00Speaker 01

  I mean, the prevalence of hate speech, and by the way, when I say these statistics, it's not just me saying these, these are now independently audited statistics that we publish. EY now independently audits them. It's 0.03%. That means for every 10,000 bits of content you do, if you keep scrolling, there'd be three bits which are hate speech. I wish it was zero. It's never going to be zero. But I kind of, for me, it just defies logic, the idea that a platform which is used by so many people every day, is so useful to so many millions of people and so many millions of small businesses, that only has 3% or so of political content, whereas 0.03% of hate speech is a sort of primary source of societal unhappiness. It doesn't, that really just doesn't add up for me, I must say.

• 48:44Alex Kantrowitz?

  Nick Clegg, thank you so much for joining.

• 48:46Speaker 01

  Thank you.

• 48:46Alex Kantrowitz?

  Great having you, and I hope to have you again sometime soon.

• 48:48Speaker 01

  Yeah, it'll be a pleasure.

• 48:49Alex Kantrowitz?

  Okay, thank you.

• 48:54Alex Kantrowitz?

  All right, that'll do it for us here on the show. We'll be back tomorrow with another show with Gavin Wood, so stay tuned for that.

• 49:04Speaker 02

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