B2| Saturday/Sunday, March 7 - 8, 2020 **** THE WALL STREET JOURNAL.
THE SCORE
THE BUSINESS WEEK IN 7 STOCKS
GAP INC.
There is no longer a leader-
ship gap at the Gap. The
struggling apparel giant said
late Thursday that it pro-
moted Sonia Syngal, the head
of its Old Navy brand, to be
its chief executive, while board member
Bobby Martin will take over as execu-
tive chairman. Gap abandoned plans to
break off Old Navy into a separate pub-
lic company earlier this year, saying the
split would have been too expensive
and complex. Ms. Syngal, who takes the
new job March 23, boosted Old Navy’s
store footprint in North America and de-
veloped its e-commerce capabilities. Gap
sharesfell 1.3% Friday.
GPS
1.3%tising division to leverage its wire-
less subscriber base, its pay-TV
customers and the stable of enter-
tainment content it acquired when
it bought Time Warner in 2018.
Two years ago, it was AT&T
that was embroiled with the Jus-
tice Department, which filed suit
against the company over its pro-
posed acquisition of Time Warner,
alleging the merger would harm
competition in pay-TV markets.
AT&T won the case and the
merger went ahead.
“We talk to advertisers. You’re
hard-pressed to find an advertiser
who says, I would like to spend
more with Facebook and Google,”
AT&T Chief Executive Randall Ste-
phenson testified during the 2018
trial.
In court, he and other AT&T of-
ficials touted their plans to take on
the tech giants in advertising as a
counterargument to DOJ’s claims
that the Time Warner transaction
would be anticompetitive.
The telecom and media com-
pany is also a major advertiser in
its own right, spending large sums
to market everything from cell-
phone plans to Warner Bros. mov-
ies, further complicating its rela-
tionship with Google, the world’s
biggest digital advertising com-
pany.
AT&T was deeply critical of theJustice Department’s decision to
challenge the Time Warner deal,
and its motivation in doing so, but
the company’s recent dialogue
with the department underscores
the reality that adversaries often
cooperate when their interests
align.
Google’s practices in the ad-
tech business are a key focus of
the Justice Department’s investi-
gation. In recent months, the de-
partment has been posing increas-
ingly detailed questions—to
Google’s rivals and executives in-
side the company itself—about
how Google’s third-party advertis-
ing business interacts with pub-
lishers and advertisers, The Wall
Street Journal reported last
month.
AT&T became a player in the
digital ad market through its 2018
purchase of AppNexus, a technol-
ogy provider for buyers and sellers
of online ads—and a vocal Google
critic.
A few months after closing the
Time Warner deal, it formally
launched Xandr as the company’s
new advertising company, encom-
passing AppNexus and other AT&T
advertising assets. It acquired
video ad-targeting service Clypd a
year later.
Xandr is pitching itself as a po-
tential counterweight in the ad
marketplace to Google and Face-
book
—Keach Hagey and John D.
McKinnon contributed
to this article.Continued from page Bopinions,” critics of the govern-
ment said officials suppressed in-
formation that could have helped
contain the virus. China says it was
quick to share information on the
epidemic.
A study released this week by
University of Toronto’s Citizen Lab
showed that Chinese social-media
platforms began scrubbing
keywords related to the cor-
onavirus as far back as De-
cember. That suggests that
platforms—including the
country’s most popular
messaging app WeChat—
were pressured by authori-
ties to censor information
even in the early weeks of
the outbreak, according to
the report.
Yet the swift scrubbing
of any government criticism
from Chinese platforms—in-
cluding an outpouring of
anger after the death of Li
Wenliang, a Wuhan-based
doctor punished by authori-
ties for sounding early
alarms about the virus—
could effectively serve as
advertising for Chinese con-
tent-moderation tools—a
proof of concept on a mass
scale, experts said.
Chinese companies are
using the epidemic as an
opportunity to “market
themselves as a necessary
part to help the government
fix their trust crisis and in-
crease their propaganda
ability in the future,” said
Rui Hou, a doctoral candi-
date studying Chinese cen-
sorship at Queen’s Univer-
sity in Kingston, Ontario.
“For any government
that’s not running away
from the China model, it
could be incredibly compel-
ling,” said Duke University’s
Mr. Perault.
Some Chinese companies
are offering censorship ser-
vices as an add-on for
cloud-computing clients.
Alibaba’s cloud division sells a
bare-bones content-moderation
package at about $240, according
to its website. For that price, the e-
commerce giant can help clients
screen up to 90,000 bits of text,
images or videos a month and filter
out pornography, drug use and
“sensitive political figures.” Splash-
ing out $60,000 will buy a five-year
subscription flagging up to 15 mil-
lion items monthly.
An Alibaba Cloud spokesperson
said its services help clients “main-
tain a user-friendly online environ-
ment in accordance to local regula-
tions.” Customers can “determine
what content is appropriate to be
used on their websites.”
Tencent, which owns WeChat,
lets clients prepay about $9,000 for
filtering 36 million images for por-
nography and other content, in-
cluding what it describes as “politi-
cally sensitive” materials such as
“political figures, political spoofs,
famous political events, etc.”
In response to questions, Ten-
cent said its technology is used by
clients to “improve their operations
security and efficiency” and “iden-
Continued from page B
tify unlawful information,” citing
pornography and “cyber violence.”
For now, foreign customers are
relatively rare, say employees at
companies offering these tools.
Since 2017, a Singapore subsid-
iary of Chinese social-media giant
YY Inc. has been selling a con-
tent-moderation system powered
by artificial intelligence to Indo-
nesia’s government to help clean
up “negative contents” online, the
Singapore company said in a
press release.
The subsidiary is also talking
with governments in Egypt, India
and the Middle East to sell similar
services, said a spokesman for the
subsidiary, Bigo Technology. The
parent company, YY Inc., didn’t re-spond to requests to comment.
Western companies such as Am-
azon.com Inc.’s Amazon Web Ser-
vices and Microsoft Corp. also sell
content moderation. On its web-
site, Amazon doesn’t mention fil-
tering political content, but does
spell out categories like nudity, vi-
olence and “visually disturbing”
content, like corpses.
Amazon didn’t comment. Micro-
soft declined to comment.
Baidu Inc., China’s largest search
engine, touts its services in banner
ads online that promise to help
companies monitor content across
tens of thousands of posts, without
having to hire their own staff.
The services are based on some
of the same underlying technolo-
gies that Facebook, Twitter Inc.
and other social media use to
curb violence, speech designed to
incite crimes, or pornography.
Chinese companies target those
problems, too.
A price list published by Baidu
shows it charges about 17 cents for
every thousand images it scans for
“politically sensitive” material,
more than it charges to flag vio-
lence and terrorism-related mate-rial or pornography.
Although Baidu doesn’t specify
what might count as politically sen-
sitive, a demo on its website shows
a picture of former U.S. President
Obama speaking in front of an
American flag. It says its algorithm
concluded the picture depicted a
public figure with 98% certainty,
and that it contained “politically
sensitive content.” Baidu declined a
request to comment.
In China, companies have refined
censorship tools partly out of ne-
cessity: Authorities demand that
platforms for entertainment, social
media, e-commerce and other pur-
poses ensure that politically objec-
tionable comments are scrubbed.
Companies risk fines or permanentshutdown if they fail to comply.
One Chinese media company
started paying Alibaba for content-
moderation products after authori-
ties closed its website—which
broadcasts podcasts and other con-
tent about the gaming industry—
for nearly a month, according to an
employee of the firm. Authorities
offered little explanation for the
shutdown, but pointed to a docu-
mentary posted on the company’s
site that explored downtrodden
lives of laborers in southern China,
the employee said.
The company, fearing another
lengthy shutdown, now uses Ali-
baba’s service to delete obvious ta-
boos such as pornography and vio-
lence, but also errs on the side of
caution on politics.
“Now we just delete any mention
of Xi Jinping,” the employee said.
People.cn, the online arm of the
Communist Party’s People’s Daily
newspaper, also offers services that
screen for objectionable content.
Revenue from its services—dubbed
“content risk control”—jumped
166% in 2018 from the year before,
according to its annual report,
though it didn’t provide specificrevenue figures. That helped boost
annual profit by nearly 140%, the
biggest increase since 2011, it said.
People.cn’s chairman recently
predicted that content moderation
in China will grow to a $70 billion
industry over the next three to five
years, and employ a million people.
Since the coronavirus epidemic
started, People.cn appears to be
seizing the moment, said Queen’s
University’s Mr. Hou, by posting
analysis of how local authorities
are keeping citizens informed
about the spread of the virus.
The rise of AI-driven technolo-
gies has enabled some businesses
to operate without armies of hu-
man censors.
The AI algorithms used in the
U.S. and China often rely
on similar technologies,
such as natural-language
processing and machine
learning. Tools that help
power recommendation
engines for services like
YouTube or Spotify can
also be used.
It is hard to say whether
Chinese or U.S. censorship
tools are more effective. A
recent study on facial-rec-
ognition algorithms con-
cluded that Chinese firm
Megvii Technology Ltd.
beat IBM and Amazon in
detecting skin colors and
genders. In October, U.S.
lawmakers added Megvii
and 27 other entities to an
export blacklist, citing
what they described as the
entities’ role in oppression
of Muslim minorities in
China’s Xinjiang region.
China’s most popular
dating app, Tantan, uses a
Megvii facial-recognition
system during the sign-up
process to create a veri-
fied account, a Megvii
spokeswoman said. But it
also helps keep users
from posting profile pho-
tos using images of Chi-
nese leaders or ones that
touch on topics like the
Hong Kong protests, peo-
ple familiar with the mat-
ter said.
The dating app also
monitors posts made by
users, the people said. In
tests by The Wall Street
Journal, a photo of Presi-
dent Xi posted on the app
was scrubbed within 30 seconds
and one of Chinese Premier Li Keq-
iang was deleted within a minute.
“The government doesn’t care if
you post a thousand pictures of An-
gelababy,” said a person close to
Tantan, referring to a pop star and
actress. “But one photo of Xi Jin-
ping is not acceptable.”
Tantan didn’t respond to re-
quests to comment.
Even with all the technology
available, many Chinese companies
still rely on humans to make deci-
sions on complex content like satir-
ical videos. Many work in smaller
cities with lower labor costs.
In Jinan, the capital of Shandong
province, one floor of the city’s
tallest office building is dotted with
miniature Chinese flags and posters
depicting President Xi. An em-
ployee said content moderators for
People.cn occupy the entire floor.
BytedanceInc., the owner of
video app TikTok abroad and vari-
ous services in China, runs offices
in Jinan dedicated to content mod-
eration, according to a person fa-
miliar with the matter. A spokes-
woman said the offices focus on
Bytedance’s own products.TWITTER INC.
A showdown is looming be-
tween Twitter Chief Executive
Jack Dorsey and Paul Singer’s
Elliott Management Corp.
Mr Singer’s activist hedge
fund has nominated four di-
rectors to Twitter’s board and taken a
roughly $1 billion stake, The Wall Street
Journal reported Monday. Elliot wants
Twitter to find a full-time CEO, which
would likely mean replacing Mr. Dorsey.
Last year, Mr. Dorsey tweeted his plans
to live in Africa for part of 2020, sur-
prising Twitter executives, but seemingly
backed off those plans while speaking
at a Thursday event. Twitter shares
gained 7.9% Monday.
TWTR
7.9%APPLE INC.
Think Apple slowed down
one of your older iPhones?
The company could owe you
$25. Apple has agreed to pay
some phone owners as much
as $500 million to settle a
class-action lawsuit claiming the com-
pany slowed down the performance of
its older smartphones so customers
would buy new ones. The per-iPhone
payout could change from $25 depend-
ing on the number of eligible devices.
Apple, which denied any wrongdoing,
said in 2017 that a software update in-
troduced at the start of that year re-
duced the performance of older models.
Apple sharesgained 9.3% Monday.
AAPL
9.3%CAMPBELL SOUP CO.
Canned soup demand is ris-
ing in response to the coro-
navirus epidemic. Campbell
said Wednesday that its
sales are getting a boost
from retailers stocking up on
its namesake product and less popular
items such as SpaghettiOs and Swan-
son canned chicken. Grocers and other
retailers have said that some consumers
are buying up staple foods out of con-
cern the virus’s spread will leave them
stuck at home. Some stores in densely
populated cities have run out of long-
lasting foods such as Jif peanut butter
and Kraft macaroni and cheese. Camp-
bell sharesrose 10% Wednesday.
CPB
10%UNITED AIRLINES
HOLDINGS INC.
United Airlines is cutting
flights and parking planes as
the new coronavirus spreads.
The carrier said Wednesday it
plans to store some wide-
body jets and is offering staff unpaid
leaves of absence in April. United will cut
domestic capacity by 10% in April from
its previous plan and international flying
by 20%, and these cuts could extend into
May. The Chicago carrier has the biggest
exposure to international markets among
U.S. carriers and has already suspended
most of its flights to China, South Korea
and Italy, as have most of its U.S. peers.
United sharesfell 13% Thursday.
UAL
13%JPMORGAN CHASE & CO.
JPMorgan Chase Chief Execu-
tive James Dimon underwent
emergency heart surgery
Thursday, his second big
health scare in recent years.
The procedure was successful,
and the acute aortic dissection Mr. Di-
mon suffered was caught early, the
bank said in a memo to employees. JP-
Morgan Co-Presidents Daniel Pinto and
Gordon Smith are leading the bank
while Mr. Dimon recuperates. His sud-
den illness is likely to revive speculation
about when Mr. Dimon will step down
from the bank he has led since 2004.
JPMorgan sharesfell 5.2% Friday.
—Francesca Fontana
JPM
5.2%Censorship
That’s Made
In China
AT&T Aids
Investigation
Of Google
PHOTO ILLUSTRATION BY JOHN KUCZALA, ISTOCK(2)AT&T has conferred
with officials to share
its views that Google is
stifling competition in
the advertising sector.UNITEDHEALTH GROUP INC.
Joe Biden won big on Super Tuesday, and so did
health-care stocks. UnitedHealth and other health
insurers soared Wednesday after the former vice
president’s better-than-expected performance in
Tuesday’s primaries. His rival, Vermont Sen. Bernie Sanders,
has proposed a health-care plan that would mean changes
for the industry. UnitedHealth sharesrose 11% Wednesday,
while Anthem Inc.gained 16% andHumana Inc. rose 14%.
UNH
11%PERFORMANCEOFHEALTH-CARE COMPANIES
Source: FactSet20- 5
051015%UnitedHealth
GroupAnthemHumanaMon. Tues. Wed. Thurs. Fri.