Tech earnings on tap this week

Presented by

With help from Leah Nylen

Editor’s Note: Morning Tech is a free version of POLITICO Pro Technology’s morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

Quick Fix

— Money, money, money: The biggest names in the tech industry are about to disclose their revenue for the start of the year, including the onset of the coronavirus pandemic in the U.S.

— TikTok download: The video sharing app’s policy chief talks to MT about setting up the company’s first Washington office, hiring during coronavirus and distancing itself from China.

— Leave tech alone: The advocacy network funded by Charles Koch argues that the pandemic proves that it’s time for Washington to stop hammering Silicon Valley and says it will put its money and political muscle into easing pressure on big tech.

WELCOME TO ANOTHER WORK (FROM HOME) WEEK; THIS IS MORNING TECH. Steven Overly here stepping in as your guest host for today. Alexandra S. Levine will be back at it tomorrow.

What’s the scuttlebutt in Washington’s tech circles? Drop me a line at [email protected] or @StevenOverly. An event for our calendar? Send details to [email protected]. Anything else? Full team info below. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.

POLITICO Pro is here to help you navigate these unprecedented times. Check out our new Covid-19 Coverage Roundup, which provides a daily summary of top Covid-19 news coverage from across all 16 federal policy verticals as well as premium content, such as DataPoint graphics. Please sign up at our settings page to receive this unique roundup sent directly to your inbox every weekday afternoon.

Sign up for POLITICO Nightly: Coronavirus Special Edition, your daily update on how the illness is affecting politics, markets, public health and more.

Tech of the Town

NUMBERS TO WATCH THIS WEEK — As the coronavirus pandemic continues to ravage the global economy, we’ll get a peek this week at its impact on the financial performance of the tech industry’s largest players. Amazon, Google, Microsoft and Facebook are all set to report earnings for the three-month period that wrapped in March, the end of which saw stay-at-home orders and business closures set in across the country. Expect executives to offer thoughts on how the crisis will affect their ongoing business as well.

— The public health crisis hasn’t touched all of them evenly. Amazon has seen demand soar as more consumers shop online and its brick-and-mortar competitors get shut down. One clear metric of success: Amazon had to hire 175,000 more workers over the last two months to keep up with orders. Facebook and Google, on the other hand, are expected to show at least a temporary setback as advertising revenue declines, particularly across categories like travel, hospitality and small business. “This has been a positive event for Amazon and a negative event for Google and Facebook, that’s the quick punchline,” said Mark Mahaney, managing director at RBC Capital Markets.

— Don’t expect to see huge fluctuations in the numbers this week, market watchers say, especially for Google and Facebook. The first two months of the quarter saw a bevy of advertising and the slowdown didn’t start until late March. Jasmine Enberg, senior analyst at eMarketer, said marketers only started pulling back spending in March, which is when ad prices started to fall. “There will be some impact in Q1, but the majority of it is still yet to come,” she said. Companies won’t be reporting revenue for April, the most disrupted month thus far, but may give some sense of how it is faring so far.

TIKTOK IN WASHINGTON — Michael Beckerman took the helm of TikTok’s policy shop just a week before coronavirus-related restrictions got underway. Now the former Internet Association chief is staffing up the company’s first Washington office and trying to make Capitol Hill inroads while the pandemic has brought business as usual to a halt. That’s meant video conferences and phone calls with Hill offices, as well as remote interviews with prospective staff. “We’re moving forward. The company’s doing well and growing, and my hope is when everybody can go back to work, we’ll have the first pieces of our team in place,” Beckerman told MT.

— Exactly how big that team will be, Beckerman declined to say. But the company currently has eight openings on its website for D.C. policy experts focused on privacy, content moderation, intellectual property and more. “It’s not going to be a WeWork-size office, I’ll say. We will have a physical office with a team that can tell the story of the company and be really proactive,” he noted. Until now, TikTok has been reluctant to engage lawmakers. A Senate Judiciary subcommittee left an empty witness chair when TikTok declined to appear at two hearings, and the company’s leader, Alex Zhu, canceled a series of Capitol Hill meetings last year. “We’ll be engaging fully with Congress. I can’t speak to specific hearings, but we definitely look forward to telling our story,” Beckerman said.

— TikTok’s big D.C. objective is distancing itself from China. The app’s ties to Beijing-based ByteDance have been a source of suspicion in Washington, but Beckerman attributes that to confusion about its corporate structure. TikTok is not a subsidiary of ByteDance, as has been widely reported, he said. Rather, the two companies share a common Cayman Islands-based holding company, also called ByteDance. And though Zhu resides in China, TikTok’s other senior executives are located in the U.S. TikTok is not available in China and data from its U.S. users is not stored there, Beckerman added. “A lot of that anti-China sentiment we really need to clear up and explain how this company is being run independently, and it’s not subject to Chinese law or a subsidiary of a Chinese company,” he said.

IS THE TECHLASH OVER? — Policy wonks at the Charles Koch-backed network Stand Together think the coronavirus has killed it. That’s because online services have become essential to daily life as people work and shelter at home, and Silicon Valley heavyweights like Google, Facebook and Amazon have been key to the pandemic response. Expect that sentiment to guide the network’s forthcoming tech advocacy work, including the grants it awards and its conversations with lawmakers, said Jesse Blumenthal, who leads the group’s tech policy portfolio. “The stakes have been revealed,” he asserted. “I think many of the complaints that were driving the techlash, in retrospect, look pretty small and pretty petty.”

— Their confidence is bolstered by recent polls that show the public’s opinion of the tech industry is on the climb. In a Harris Poll survey, 38 percent of Americans said their view of the tech industry has turned “more positive” since coronavirus arrived, compared to 9 percent who said it’s now “more negative.” That same survey found 40 percent of Americans believe the tech industry should help solve the outbreak, and 81 percent approve of large tech firms specifically helping to trace coronavirus cases. A National Research Group poll concluded 88 percent of Americans have a “better appreciation” for tech’s role in society.

— But tech’s foes won’t go quietly into the night. Critics like Sens. Josh Hawley (R-Mo.) and Elizabeth Warren (D-Mass.), and Rep. David Cicilline (D-R.I.) have continued to call attention to concerns about consumer privacy and market competition throughout the pandemic. “Look, I’m not sort of trying to say this is a Kumbaya moment and everyone has suddenly shifted their minds and, quite frankly, I don’t think the polling data says that,” Blumenthal said. But those lawmakers “carry a lot less weight,” he added. “Quite frankly, the complaints ring a lot more hollow.”

— Not all poll results are so favorable, either. Morning Consult released new survey results today showing 59 percent of Americans are at least somewhat uncomfortable with tech firms sharing their location with the government as part of the coronavirus response. The same survey found 45 percent of people had “not much” or no trust at all in large tech companies to build an effective tool to track the disease. By contrast, 41 percent of people said they had “some” or “a lot” of trust.

FTC’S CHOPRA URGES ACTION ON GRUBHUB, DOORDASH — Food delivery apps like Grubhub and DoorDash “may be breaking the law” because of what they tell consumers about tips versus how they actually treat them, FTC Commissioner Rohit Chopra said Friday. “Some dominant food delivery apps have even swept away tips left by customers to use them for base wages,” he said on Twitter. “If these apps are lying to users, they may be breaking the law. Regulators must act.” The FTC can challenge business practices that are “unfair or deceptive,” and has brought many cases against companies that don’t follow through on promises made to consumers.

— Local efforts: Food delivery apps like Grubhub, which owns Seamless, DoorDash and UberEats have said they would suspend some or all of the commissions they take on orders to help restaurants, closed because of pandemic stay-at-home orders, continue to offer takeout. But restaurants have said other fees still apply. San Francisco and Santa Cruz have implemented emergency orders to cap fees that food-delivery services can charge at 15 percent. City councils in Boston, New York, Chicago and Los Angeles are all also considering measures that would cap fees.

NEW LOBBYING REGISTRATIONS — Google has tapped a trio of lobbyists at The Roosevelt Group to advocate for the use of its cloud computing services at the Defense Department. Google spent $1.8 million lobbying the federal government in the first quarter of the year after cutting back on its roster of outside consultants. Meanwhile, Yelp has enlisted lobbyists at Squire Patton Boggs to lobby on tax provisions in federal coronavirus relief legislation. Satellite communications firm Ligado Networks has added The McKeon Group to work on 5G jurisdiction issues between the FCC and Defense Department. Ligado recently won approval from the FCC to run 5G services on its spectrum over the objections of the Pentagon.

TECH’S NEWEST DEFENDER — Martha Stewart, who, it turns out, is an Apple fangirl.

Transitions

Cristina Caffarra has joined the advisory board of the American Antitrust Institute. Caffarra leads the competition team at consulting firm Charles River Associates in Europe and acts as an unpaid advisor to the Texas attorney general’s office in its antitrust probe of Google.

Silicon Valley Must-Reads

Apple’s advice: President Donald Trump said Friday that Apple CEO Tim Cook predicts the economy will rebound sharply from the pandemic, CNBC reports.

Amazon fraud detection: The e-commerce behemoth is testing out video calls with third-party sellers as a way to cut down on fraud, Reuters reports.

Send in the drones: Robots and flying drones are moving further mainstream as they help deliver medical supplies, groceries and other necessities during the crisis, The Wall Street Journal writes.

Ready for the end: Silicon Valley Preppers, people who work in tech and have long been gearing up for troubled days, feel vindicated by the coronavirus crisis. The New York Times has more.

Back to work: Tesla asked dozens of employees at its Fremont, Calif., car plant to return to work April 29 despite stay-home orders, Bloomberg reports.

Quick Downloads

Privacy flip-flop: Some states want to access GPS data on smartphones to track coronavirus cases, but Google and Apple aren’t so sure, Reuters writes.

Washington’s letter machine: Democratic senators from California and New York pressed FCC Chairman Ajit Pai to extend the deadline for public safety officials to comment on the agency’s net neutrality repeal. Read the letter.

Not just Amazon: Handicraft site Etsy is seeing its fortunes turn for the better amid a surge in demand for cloth face masks, according to FT.

Across the pond: Germany is abandoning its home-grown efforts at contact tracing and joining other European nations in using an approach backed by Google and Apple, Reuters reports.

Down under: More than a million Australians downloaded a contact-tracing app within a few hours of the government releasing it on Sunday, according to BBC.

Tips, comments, suggestions? Send them along via email to our team: Bob King ([email protected], @bkingdc), Heidi Vogt ([email protected], @HeidiVogt), Nancy Scola ([email protected], @nancyscola), Steven Overly ([email protected], @stevenoverly), John Hendel ([email protected], @JohnHendel), Cristiano Lima ([email protected], @viaCristiano), Alexandra S. Levine ([email protected],@Ali_Lev), and Leah Nylen ([email protected], @leah_nylen).

TTYL and go wash your hands.