We've had a busy few days at this year's Web Summit in Lisbon.
Here are some of our observations from day four and the week as a whole.
Vestager: ‘controlling tech requires more than competition law’
Margrethe Vestager, the EU’s Competition Commissioner and soon-to-be Executive Vice-President for Digital, said yesterday that her top priority in her combined roles will be to ensure that technology is built ‘to serve people’. But she also noted that ‘the right framework’ would need to be found, because big tech’s growing ambitions meant competition law enforcement could only do ‘part of the job’.
Speaking on the final day of Web Summit, Ms Vestager stressed that the use of antitrust powers to break up tech companies would only be considered where it was ‘the only solution to the damage’ – reiterating her previously stated position that this is unlikely in practice.
Pointing to that those who advocate such drastic action, she noted that no model had yet been put forward to explain how it would be done. Without one, she warned, there was a risk that problems could be created that don’t exist today.
Ms Vestager touched on a wide array of other subjects, including the regulation of artificial intelligence. She said the task would be ‘very tricky’ and would involve ‘listening to stakeholders everywhere – and quickly’, but added that she also saw ‘no limits to AI’s ability to support what we want to do as humans’.
Outlining some of the key challenges, she said: ‘We need to get in control of the cornerstones so that we can trust it, so that it has human oversight, so that it does not have bias and so we don’t take the world we have now and set it in stone.’
On data privacy, she spoke of her desire for consumers to be able to control what trail they leave behind online. However she also described herself as a liberal at heart, and said she hoped the market would help to find a solution.
Democracy in the digital age
On another stage, Justice Commissioner Vera Jourova described her biggest challenge as finding a balance between censorship and passivity in the fight to preserve democracy in the internet age.
Explaining how the issue was addressed during the recent parliamentary elections, Ms Jourova said the EU worked with tech companies to target disinformation and encouraged member states to look at their political campaigning rules.
But she also stressed that the challenge goes beyond technology: ‘We have to focus not only on disinformation, but also on the people that believe it.
‘We have to create more resilience in society, and we have big plans to address this through education. Critical thinking has to play a much more important role.’
The theme of building trust online featured in a session involving David Graff, Google’s global head of product policy and content moderation, who explained on day four how the world’s biggest search company approaches the challenge.
Mr Graff outlined the inherent tension between the development of web technology that democratises the publishing of content, and the ability of ‘bad actors’ to exploit its ability to zone in on particular demographics and create virtual communities.
In addition to its army of content moderators, Google has built a 150-strong global team to look after its content policies and manage associated legal issues. It formulates policy via a process that looks ‘a lot like law-making’, with a range of stakeholders consulted including experts in different regions.
Google uses a combination of manual reviews and machine learning to remove ads that violate its rules (which at a high level state that ads should not be misleading or push harmful information). And while it treats political ads in the same way as any other, the company is ‘thinking hard’ about the spread of falsehoods.
If it is asked by foreign governments or courts to remove content, Google will do its own analysis to assess the legality of the request, taking into account the impact on things such as freedom of expression, minority rights and the right of association.
With various jurisdictions grappling with whether (and how) to regulate user-generated and other forms of content, Graff said it was important for the tech industry to engage with government to find the best route.
Are data rights human rights?
Michael O’Flaherty from the EU Agency for Fundamental Rights, Lenovo CIO Arthur Hu and Regan Ralph from the Fund for Global Human Rights debated whether data rights are human rights on the final day.
Arguing that human rights are just as relevant in the online world as they are offline - and describing GDPR as a positive example of a regulation applying the principles of the UN’s Universal Declaration of Human Rights - Mr O’Flaherty warned that it would be dangerous to create any new bill of data rights that would ‘compete’ with existing human rights standards.
He also stressed the importance of ‘slowing down’ and thinking carefully before creating any new data rules. He said that more learning was needed about what AI, for example, actually meant for data rights and that we needed to ‘test the edges’ of existing regulation such as GDPR to work out where to draw the line.
Healthtech: the world according to app developers…
The impact of tech on healthcare was another major topic of discussion over the course of the event.
One particularly lively session featured Dame Til Wykes (King’s College London), Daniel Sobhani (CEO of Freeletics, an app for AI-powered fitness coaching) and Alexandra Zatarain (co-founder of Eight Sleep, which provides sensor-enabled beds that track sleeping behaviour and coaches clients on how to achieve a better night’s rest).
In Dame Til took a strong stance on tech being there to supplement, rather than replace, doctors, but said that in her view, app developers had so far failed to provide compelling scientific evidence that their products deliver the benefits they claim.
Both Mr Sobhani and Ms Zatarain stressed that tech (and specifically AI) can improve healthcare by generating real-life data. Mr Sobhani added that improving fitness requires people to make significant changes to their daily routines, with apps adapting to users’ needs over time (while a doctor can only give general advice at certain points). Ms Zatarain added tech like hers can collect valuable behavioural data over a long period that can be made available to all, delivering instant benefits.
(On a related note, the German parliament is currently working a bill to make apps prescribable by doctors as well as easing providers’ access to remuneration via the health insurance system so long as they can provide proof of results. You can read more on this on our digital blog.)
In a separate session, Gary Mudie of Babylon Partners pointed out that AI can give doctors better information on their patients than they can glean through face-to-face conversations. He also highlighted a study that shows certain medical apps have not only reduced the number of doctors’ appointments but also hospital attendance – suggesting that they improve health outcomes.
… and VC investors
A number of VC investors gave their views on healthtech over the four days in Lisbon. There was clear consensus that the sector is ripe for disruption, with tech’s ability to enable personalised healthcare seen as a clear benefit.
AI, robotics and edge computing (which processes data locally to remove latency) were singled out as key technologies, particularly in relation to neurology, cancer and mental health.
However, investment has only really started to flow in the past couple of years. One possible reason, according to Marc Rougier of Alaia Partners, could be that in the past, healthcare experts lacked entrepreneurial and technological expertise, although this dynamic is starting to change.
Dirk Kersten of Forbion Capital Partners and AV8 Ventures’ Min Hu added that only recently have the life sciences and tech investment communities come together to develop products that both can invest in simultaneously. Ms Min also noted that challenges facing the pharma industry, such as the cost of drug development, have led them to search for startups that can help disrupt the status quo.
John Zibert, chief medical officer at LEO Innovation Lab, also noted that the blockbuster ideas do not have to be high-tech, with recent billion-dollar acquisitions in the space – including Amazon’s deal for Pillpack – involved simple solutions that address patients’ daily needs.
Another hotly debated issue was the protection and monetisation of patient data. Lu Zhang, founder and managing partner of Fusion Fund, proposed establishing an expert third-party intermediary to take care of data protection, rather than involving hospitals which have an inherent conflict of interest. Dr. Marco Huesch, chief medical officer at Ping An Global Ventures, added that blockchain could act as an important enabler.
Fintech: widening adoption and automating switching
We heard from sources as varied as Libra and Akon about how cryptoassets could democratise payments: giving the unbanked access to increasingly electronic financial systems will be a key challenge of the next decade.
But fintech products need wider adoption among the general population too. Talk of effective and simple user experiences was never far from developers lips as the week rolled on.
We also heard lots of talk about building platforms that offer a range of financial services.
Perhaps the ultimate aim was discussed by Gogo Group, which is building a product that allows consumers to completely outsource their financial decisions.
From banking to insurance, utilities and more, a single comparison service would make regular switches on behalf of its customers to ensure they are always getting the best deal. All this would be managed from a app.
Perhaps as fintech moves towards comprehensive platforms and beyond, and as regulation continues to bite on issues of data and business portability, we’ll be seeing more concierge-style services to take advantage of the ease and speed with which consumers can switch between services.
Tech and capital markets
Another topic that cropped up a lot was the current state of capital markets: start-ups are remaining private for longer and there is a growing taste for direct listings.
A particularly insightful session was held on day four with Ravi Viswanathan, Founder & Managing Partner at New View Capital and Nizor Tarhuni, Director at PitchBook.
On the question of financing via private equity investments rather than IPOs, the panellists agreed that the private market can now easily handle triple digit transactions.
Furthermore, PE investors now have a seasoned playbook on increasing market share and revenues. As a result, PE exits have increased from 5 to 20 per cent over the last four years.
Nizor pointed out that companies get distracted by IPOs and Ravi added that companies with business models that are hard to understand or burn cash are getting punished in the public markets. Thus, IPOs tend to remain viable for companies with a relatively simple, profitable business model.
The panellists noted that, while direct listings tend to not actually be cheaper than IPOs, they provide better price discovery. They predicted that, over the next five years, direct listings will stay below 10 per cent of all public offerings.
Fashion may not be synonymous with technological innovation, but Tommy Hilfiger CEO Daniel Grieder revealed yesterday that all of its products will be digitally designed and manufactured within two years.
Traditionally, clothes are sketched on paper and sent to a factory for prototyping. If the designer doesn’t like what comes back, the cycle starts again. But implementing digital technology removes the need for this back-and-forth – making production much more efficient and sustainable.
‘To be able to win in this world, you need to be innovative and disruptive,’ Mr Grieder said.
Quotes of the day
‘Kudos to all the corporate innovators and entrepreneurs out there! It’s your job to humiliate yourself until you prove everybody wrong. Don’t let failure steal your mojo.’
Alex Osterwalder, author and founder of Strategyzer.com
‘I don’t believe in having a cult around a CEO. It is not healthy. But you do need leadership.’
Mitchell Baker, executive chairwoman, Mozilla Foundation