Phillip: [00:01:07] Hello and welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Phillip.

Brian: [00:01:13] And I'm Brian.

Phillip: [00:01:14] And Brian, you have some news.

Brian: [00:01:17] Yeah, big news. I left the Amazon, {laughter} which is good news for this podcast because I can say, "Amazon" now.

Phillip: [00:01:26] Yeah, you can actually say the A-word.

Brian: [00:01:29] Yeah. What I should do is... I feel like pulling a Steve Ballmer right now and yelling Amazon for like two minutes. {laughter}

Phillip: [00:01:39] Very, very happy to have you back on Team Future Commerce. Team FC. Not that we ever lost you.

Brian: [00:01:46] We have like three months worth of Amazon content to talk about.

Phillip: [00:01:51] Are you guys ready for the next forty five minutes? We'll just talk about Amazon.

Brian: [00:01:55] We're back to being an Amazon podcast.

Phillip: [00:01:55] It'll be like old times. Well, I'm sure at some point one day you'll share part of your journey and what all your time at Amazon meant to you. But welcome. Glad to have you back.

Brian: [00:02:07] Yeah. Thanks. It's exciting.

Phillip: [00:02:09] Yeah. And we're coming into summer now. We're about... This is our two year episode or well, right around our two year anniversary. Right?

Brian: [00:02:17] Almost. We're getting there. We launched at the end of August two years ago.

Phillip: [00:02:22] Yeah.

Brian: [00:02:24] So, close. Getting close.

Phillip: [00:02:25] It's huge. We're gearing up into the summer months, bringing a lot of new content. And we have a jam packed show for you here today. So let's kind of jump right into it. You want to start off with some Amazon news just old time's sake?

Brian: [00:02:38] So let's just start talking about Amazon. Why not?

Phillip: [00:02:42] Why not? {laughter}

Brian: [00:02:44] There's nothing holding me back from that.

Phillip: [00:02:47] In the past week, probably the biggest story to come out around Amazon is that they're getting into pharmacy. They have reached an agreement to acquire online pharmacy PillPack. And that's huge.

Brian: [00:03:00] Huge. Yeah, absolutely. I mean, it's just another part of the story. After Whole Foods, it makes sense. I think it's a really smart move.

Phillip: [00:03:12] Yeah. And I don't think... It's kind of like the anti Whole Foods. Whole Foods is like supplements and wellness through food and nutrition and diet. And this is the other end of the business, which is if none of that garbage actually works for you, here's some pills you can take. PillPack is interesting because here in the United States, they're already pretty huge. They're doing business in 49 states, not including Hawaii. And they actually... So there were a couple large retailers, including Walmart, who, you know, comes up over and over in these types of conversations, who were trying to take over the five year old startup. And PillPack's one of like probably a half a dozen that I can think of off the top of my head that are in the space, including Optum, which I think is already owned by a large health care provider in the United States and some others who are sort of forging new ground in this area. And Amazon gives some huge legitimacy to this space. And it probably is the first in a row of dominoes to...

Brian: [00:04:25] You have to wonder if this is going to play into like what they're doing with Berkshire Hathaway and JP Morgan Chase around...

Phillip: [00:04:34] Yeah. Oh, yeah.

Brian: [00:04:36] Yeah.

Phillip: [00:04:36] Oh talk about that. So if you didn't catch that episode, what was that story?

Brian: [00:04:40] We don't know too much about it. There's an initiative between JP Morgan, Amazon, and Berkshire Hathaway to sort of reinvent health. They haven't given us too many details on it, yet. But I have a feeling this will probably play into it. When I say reinvent health, I think reinvent health insurance and care. And so I would imagine that whatever they come out with, which will probably be rolled out to Amazon employees, I guess, or an option for them, they'll have the ability to get their prescription drugs via Amazon same day shipping. Amazon two hour. Amazon one hour shipping. {laughter} And just completely eliminate that need for the 24 hour pharmacy.

Phillip: [00:05:41] Oh, for sure. Oh, big time. Yeah. Oh. Amazon Prime. I mean, a lot of pharmacies, in the United States anyway, and again, we speak from our perspective, even though we have a very large international audience that listens to Future Commerce. But here in the United States, there's a lot of pharmacies that already do in-home delivery, direct your house delivery. That's a budding market itself. So this is very, very, very interesting stuff. I have to wonder... It reminds me of my favorite tweet so far of 2018, which is... I'm trying to find the Twitter source. If you find it, let us know in the show notes or in the comments over on FutureCommerce.fm. But my favorite tweet of 2018, so far, is "I just bought a toilet seat on Amazon.com. And now Amazon thinks I have an insatiable desire for more and more toilet seats and continues to recommend me toilet seats at every turn." And I have to wonder if that's where we're heading with pills. It's like, "I took antibiotics for this cough that I've had. And now Amazon's shoving more and more antibiotics in my face." Amazon will be the reason that we have super viruses and super... Actually that sounds about right.

Brian: [00:07:13] Yeah. Yeah. I mean I have a feeling that they'll probably start to put some limitations around that. Oh yeah. Toilet seats. That's kind of a one time purchase, or at least once every couple of years purchase, or however often you change your toilet seat. I won't judge. Drugs might have a few more walls around them than toilet seats do.

Phillip: [00:07:43] Here's what's really, really interesting, and there're a lot of startups in this space. And so there's one locally here that's gotten a lot of press here in West Palm Beach. But anyway, I don't need to give them a whole lot of advertising. I think they're called... What's the name of that company? Mail My Prescriptions. I think it's who it is. The other big in the startup space, they're like tech startup here in South Florida. But what's interesting about them and a lot of others is they're more in the wholesale model. So instead of you having to have direct relationships where you have an insurance carrier who's, you know, basically providing you a standard co-pay through your insurance program...

Brian: [00:08:30] You buy your antibiotics in bulk? {laughter}.

Phillip: [00:08:30] Well it's not just antibiotics. It's usually like maintenance medication, like statins, or like beta blockers, or things for like cholesterol, or heart disease, or things that you would probably be on for quite a long time.

Brian: [00:08:45] Oh interesting.

Phillip: [00:08:45] And those are some of the largest drugs here in the United States. And because they're so prevalent, and they're so much of them, and so many people take them, you can buy them...

Brian: [00:08:55] In bulk.

Phillip: [00:08:55] In wholesale. Yeah in bulk for very, very cheap. But the way that these companies do it is you're basically buying options. So I buy it and lock in my price at like 12 cents a pill, and I buy them in massive quantities. And then, they as an online pharmacy, ration them out to me over a period of time.

Brian: [00:09:13] Oh interesting.

Phillip: [00:09:14] It's a really interesting model. And I don't take any prescription medication myself right now.

Brian: [00:09:20] Me neither.

Phillip: [00:09:22] So, I don't have direct knowledge of how PillPack works. But it's interesting. And there's been a few sort of tech talks around this space. I think there's some interesting problems to solve. And it also, in my mind, changes the way that education and employment happen for people in the drug industry.

Brian: [00:09:43] Right.

Phillip: [00:09:44] Right? Because when you think about when people go to school for pharmacy, a lot of what they learn in pharmacy, if it's not compounding or actually making and packaging pharmaceuticals, a lot of that's being done by machines today. So are we reducing the barrier to entry to be a pharmacology student? Is it now a glorified telephone operator in 2020 and beyond. So these are all interesting questions, right?

Brian: [00:10:14] Here's another interesting thing. I stopped by Walgreens to pick up some medication. I don't remember why. And I noticed that there was a sign in the window of the pickup, and the sign said, "Oh, you can pick up these additional items when you drive through here." And it had a list of additional over the counter medicine, I think, and maybe some other small items usually related to like baby care, I think it was. I think it was like infant Advil or something like that. And a few other like family focused items. I wonder if some of these pharmacies will sort of find ways to innovate and kind of push back against... Find ways to use those those windows for grocery pickup or other kinds of pick up. As they have to compete with with PillPack and others like them. I would love that.

Phillip: [00:11:22] It starts with the upsell of the Benadryl and the Tylenol, and it moves on to longer tail items.

Brian: [00:11:30] Milk.

Phillip: [00:11:30] Right, exactly.

Brian: [00:11:31] Yeah. Totally. All of these like Walgreens, Rite Aid, and others are set up so perfectly to do this, to do grocery pick up.

Phillip: [00:11:44] Yeah. They have the infrastructure.

Brian: [00:11:47] Yeah. Right. Drive around them usually. Yeah. That would be very interesting. It'll be interesting to see. I know that Albertsons bought out Rite Aid. I wonder if they have any plans in that in realm. Because they could use them sort of as their pickup centers or distribution of some sort.

Phillip: [00:12:09] And Albertson's already owns Safeway and they are very large grocery chain. I mean, they could be interesting. Watch the space. Yeah, it's interesting. There was a figure that was being juggled around and it's funny because I don't have it off the top of my head, which is pretty on brand for me on all my podcasts. I don't have it on hand, but maybe somebody else can help us source it. But something like we're at like a record 9% of empty retail space in the United States. Something to that effect.

Brian: [00:12:51] YYeah. Actually I just saw that.

Phillip: [00:12:53] The very last Toys R US closed up this last week or something. There were all these fun means that were floating around on Twitter and Facebook. What I found was really interesting is some of the applications. And I think we talked about this some time ago of unused retail space that's going out to very interesting applications like a resurgence of like indoor bounce house play places in suburban America. Also like charter schools take over retail space here in South Florida. It's been a very big thing. We also are seeing a lot of houses of worship that are taking over old retail space. So I wonder if, as we sort of you know, the more that even the way people get their, tying it back to what we're even talking about here... The more that people will begin to move their prescriptions to online delivery or in-home delivery, and we don't need the the retail space and infrastructure in that way and the way that we needed it before where we were sort of marrying convenience and grocery with pharmacy. I wonder if we're going to begin to see a shuttering of those types of spaces, too. And if locally here... You mentioned Rite Aid. Rite Aid bought out Eckerd company here in Florida some time ago, 10 or 15 years ago maybe, and they shuttered most of the stores here in Florida. And a lot of those, you know, old retail spaces now are like community banks. And one became a Wendys. I'm trying to think about, you know, that the retail footprint, the retail real estate thing that's happening right now. Retail is growing. Real estate is emptying out. And that displacement creates other opportunity for other types of things that actually need real estate.

Brian: [00:14:53] Yeah. I think it's a really good point. Yeah, it's interesting. The mall vacancy rate is at a six year high right now. I mean, we've talked about this ad nauseum, but who actually goes to the mall anymore? There's no...

Phillip: [00:15:07] I go to the mall.

Brian: [00:15:10] The last time because I was waiting for a movie and there was nothing else to do. Malls and retail space, all of it is still changing, and it's going to get more dramatic. I think even more dramatic coming up here. Speaking of Amazon, I think it's going to present a lot of opportunities for retailers who don't have a physical space that could really come in and get everything at a discount. We saw like TechStyles. They own ShoeDazzle. And they partnered with Kate Hudson on her brand, Fabletics.

Phillip: [00:16:04] Yep. Yep.

Brian: [00:16:06] %I know that they're expanding their retail footprint. And I thought we've talked that, you know, we've talked about this a lot. But I think that all this is doing is allowing digitally native brands to come in and swoop up these places at a discount and make way for brands that are actually gaining ground in consumers minds and pocketbooks online. And instead of using retail space to just sort of grow your footprint, they're using it as more of a customer service center. They're putting in stores where where they have strength instead of trying to expand their reach. So it is just a different use of space for retail. And like you said, other types of companies are coming in, as well. Like you said, the bounce houses, the trampoline places...

Phillip: [00:17:02] Which is, you know, a fad. I don't know if those things are stay..

Brian: [00:17:10] Sometimes there are temporary type businesses that come in and out of these places.

Phillip: [00:17:14] Yeah.

Brian: [00:17:18] Pop up.

Phillip: [00:17:19] More Halloween and Christmas stores and... The mall near me, to your point, and a lot of strip malls around here are like 90% Sprint and T-Mobile stores now and AT&T and Verizon and like cellphone stores.

Brian: [00:17:34] Which are basically service centers, as well. I mean, in many ways.

Phillip: [00:17:38] Yeah, that's exactly what they are. One that's shocked me and also kind of ties back into the health care discussion is how many in-person service centers that we have for like Blue Cross, Blue Shield and other insurance providers here, again, in my locale. So they move into old retail space, and in some cases they're even building brand new real estate. The one actually renovated a Carrabba's, which I thought was really interesting. When was last time I ate at Carrabba's? Probably the last time that I used my health insurance in a very large, meaningful way. Anyway. I don't know how we tie that into Juggalos, but we might as well. {laughter} That's the segue into...

Brian: [00:18:29] That's your worst segue ever.

Phillip: [00:18:30] Yeah, I know. If you're juggling... If you're juggling health care, speaking of juggling... No. Since we were talking about Amazon...

Brian: [00:18:38] I'm going to interrupt one your segues....

Phillip: [00:18:40] You do this to me ever time.

Brian: [00:18:43] You mentioned community banks and such. I think banks are kind of struggling with what to do with their retail spaces, as well, because they have these really large retail spaces that they don't necessarily need all that space. And it was interesting, a few weeks back, I went to a Capital One cafe.

Phillip: [00:19:06] Oh, yeah. That was... Yeah. Yes. Please talk about this because you sent me random pictures, and I was like, "What in the world am I even looking at?"

Brian: [00:19:15] Yeah totally. When I went there, I was in the same boat. But it's basically a Capital One coffee shop. It's totally branded Capital One. They use Pete's coffee, and it's a bank. And it was quite an interesting space.

Phillip: [00:19:34] It's a bank, but it's a coffee shop?

Brian: [00:19:36] Open space. They're like, "Yeah, come in. Work here. We want you to use this space." And, of course they're like, "Oh, and no pressure. We're not paid on commission. We're just here if we need us." But it's interesting. I think banks are having to find other ways of using their spaces and, you know, maybe get into the coffee game, too. Make a little money on coffee. Not really, but... The idea is I think they're trying to use their spaces more creatively because with ATMs being as powerful as they are and the cost of rent in Seattle being as high as it is, I think they're looking for interesting ways of using their spaces to attract people and not just waste probably very high rent space in Seattle just for their bank.

Phillip: [00:20:36] Yeah, for sure. Crying out loud. This is insane to me. And it's sort of maybe it's a hallmark of where the global economy is at the moment. More and more financial and banking products are being created and more and more consumers are seeking them at the moment. And it's noisy out there. In fact, once upon a time, maybe 15, 20 years ago, if you walked into a bank, let's say you had some money, you had some income that you wanted to find an investment product to put it into, you might trust your local bank to be able to give you good advice around that. Now people are sinking it into Bitcoin. There's an app every day of the week that you could use to make free stock trades. Banks have to get creative to attract customers and their financial products outside of, you know, personal checking, which is now commoditized and basically free. You know, in the last 20 years, that's just how banking is. So you have to sell other products. And if you have to attract people with the drug of the day, which happens be coffee, maybe that's one way to do it. Free Internet, coffee, and a bank. And maybe you open up a checking and savings and a home equity line of credit.

Brian: [00:21:56] They call that the coffee package?

Phillip: [00:21:56] The coffee package.

Brian: [00:21:58] The red-eye.

Phillip: [00:21:58] It's the red-eye. We call it the red-eye. Unbelievable.

Brian: [00:22:05] Yes. All right, sorry to interrupt your terrible segue.

Phillip: [00:22:10] The red eye. Or the black eye... Speaking of black eyes...

Brian: [00:22:15] Back to the Juggalos.

Phillip: [00:22:16] Juggalos? OK. Actually, so on the Amazon tear... I love that we can talk about Amazon now. This is fantastic. There are a lot of stories in the last week and a half or two that, some of them are sort of like bringing back or updates to stories that we brought you a few months ago, but a lot of stories around facial recognition, one of which had just popped up for me... It was re posted over on futurism.com. But the original article that I found was over on theoutline.com. And it's a story about how Juggalo makeup defeats facial recognition and is effective at defeating facial recognition. And this comes from sort of like a joke post on Twitter. But it is actually quite true in that it misidentifies people based on the characteristics, the the sort of like feature lines that are used in facial recognition to identify people, which usually, by the way, if you're familiar with the technology that's used for the face unlock or face I.D. on Apple's iPhone X or 10 or whatever it's called, I can't believe that 30 years later we're still doing the X or 10 thing with Apple OS X... I don't know. I don't know what to call it, but that's what it is. And, you know, it's pretty good at recognizing you, whether you have a hat on or whether you have glasses on or whether you have makeup on. But for whatever reason, the Juggalo makeup, which if you're not familiar, is sort of like clownesque, Harlequin type makeup as worn by the fans and the performers of the band Insane Clown Posse, which in and of itself I never thought we would ever mention on this show. But yeah. So facial recognition technology is being defeated pretty easily by Juggalo makeup, which I think is you know, it's funny, but it's interesting because it brought up when we were talking in the pre-show, it brought up a lot of other topics around how facial recognition is being used and sort of broadly adopted. And one of the main technologies that are being sort of adopted nowadays is the AWS service or Amazon Cloud Services, Amazon Recognition, which can take video streams and parse videos for facial recognition data and easily cross-reference it across in another existing database of attribution or relational data you might have on known faces. So, you know, law enforcement is using this now, government's using this in interesting ways, pilot programs across the country and how Amazon is selling this product into police departments. So anyway... Interesting...

Brian: [00:25:16] Just FYI this is actively being used. Washington County in Oregon, they've been using recognition for a year. And I mean, I think they're really happy with it. You know, it's cut down identification time on reported suspects from two to three days to minutes.

Phillip: [00:27:25] I mean, you pair this with pervasive closed circuit television, or street camera, and you basically have what was the Will Smith movie?

Brian: [00:27:41] Enemy of the State.

Phillip: [00:27:44] Enemy of the State. You basically have that technology.

Brian: [00:27:46] No, actually this is an interesting point because private companies can absolutely use this at their will. I bet you that a lot of them probably already are. And we just don't know about it.

Phillip: [00:28:03] Yeah, that's the main. That would be the main consumer. Like when I say consumer product that Amazon puts out, that's the main business use case here is to be able to parse facial recognition data from incoming image and video streams.

Brian: [00:28:17] Which let's go all Enemy of the State for a second. If that data is able to be accessed by law enforcement, you might as well not even worry that the government is using it because private security cameras are everywhere. So in short, it doesn't really matter if the government's using it. And it does. It does. Don't get me wrong, I shouldn't say that.

Phillip: [00:28:47] There are other privacy concerns that aren't government related.

Brian: [00:28:52] Exactly. If you're worried about the government being able to access your iPhone, don't worry. They don't need to. Not long from now. {laughter}

Phillip: [00:29:04] But what do you think you're Arlo camera or whatever other camera, home security camera device you might have in your house... What do you think it's doing when it tells you a certain person is home? That presence information is something that's been concerning me for some time. I think over a year we've been talking about that here on the show. Not just who you are, but where you are, and when you are.

Brian: [00:29:29] Yeah.

Phillip: [00:29:31] And those things, I don't know that we've figured out how to monetize that specifically yet, but I'm waiting for the day when, you know, that information is super important to, you know, the pizza delivery company who wants to send me a just-in-time ad at 6:00 p.m. when the kids are complaining about food.

Brian: [00:29:48] Because it's listening to them complain about food through your Amazon Echo device?

Phillip: [00:29:52] Yeah. Yeah. Precisely. All of that kind of stuff. When you draw a line between all of the things that are happening both online and offline or environmental data gathering that's happening around us, it's quite striking. And that's not even government use. I do think it's kind of creepy from a government sense. You know, this sense of Big Brother being able to sort of know who we are and where we are whenever we are there. But let's come back. Why would Amazon create a product like this? OK, so some of the recognition actually does have some sort of consumer or tech uses. So let me give you good example. Let's say that we had a video podcast or let's say that we had some sort of a video stream, a live video stream. If I wanted to use Amazon's recognition, basically it could understand that your face is different to my face on two incoming video streams and be able to automatically, switch lower thirds or be able to contextually play with that video stream to add context to it. And we saw this at the royal wedding. We talked about this already. So being able to understand Brian's face and be able to put a lot lower third automatically, you know, dynamically generated that is on Brian's camera stream that says that this is Brian Lange of Future Commerce. And grab some interesting contextual information from that. So there are probably some use cases that are useful and novel that aren't just creepy government. But the fact that Amazon was piloting this with law enforcement organizations, is a little bit interesting...

Brian: [00:31:42] Yeah you'd think you'd hear about it with private companies, not law enforcement.

Phillip: [00:31:46] For sure. For sure. Yeah, but the story that made the rounds, especially like the NPR podcast stories that sort of went deep on this is the case that it's being applied to law enforcement. And at some point somebody has some concern about how that automation...

Brian: [00:32:09] I think, the biggest issue, and you're referring to that NPR story which is just really interesting. But I think the biggest concern was that it happened without anyone's real consent. It just all of a sudden happened. All of a sudden the government was using it, and no one really voted on it. No one really was aware that it was happening. The public had no real notification that it was going to happen. And that's super concerning, at least in, I think it was Orlando or one of those cities.

Phillip: [00:32:39] Right. Right. And in fact, some public outcry has caused some of this programs to end, so Orlando's police department did drop the Amazon pilot of their recognition service. Good article over on Gizmodo about that if you want to check it out. So I think what's interesting here is that there's a privacy concern that, you know, I sort of have a through line to that's not Amazon based. That's sort of just data gathering and aggregation based that we have no control over, that GDPR also has no control over. Even with those who are strictly adhering to GDPR, there's the spirit of the law, but the letter of the law doesn't apply to certain instances and use cases, which I think are sort of concerning for me. So I kind of wanted to go there. And I think a lot of it's sort of Facebook centric, but I wanted you to finish up any thoughts you might have.

Brian: [00:33:34] Yeah, well, I just think there's a lot of opportunity for commerce here for sure. Obviously, like knowing who people are when they walk into your store is going to be super useful for personalization, for being able to best address their needs, to connect them to their account...

Phillip: [00:33:51] In-store pick up.

Brian: [00:33:56] There're so many uses for this. I totally see why Amazon is piloting this and ready to to roll this out. We experienced the Go store and talked about that earlier last year, and I could see that getting even better. And like, I don't know, there're a lot of uses for this. Combine that with something like Noveto Systems, which is personalized sound beamed directly to your ear.

Phillip: [00:34:36] Talk about this a little bit because this was interesting, an interesting technology that I hadn't seen. You pointed this out to me earlier this week.

Brian: [00:34:43] So it's personalized sound. Basically, this technology can shoot sound in a very directionalized manner, directly to your ear. So it's like having headphones on, but you don't have anything on, which is really crazy. Like so many like questions that I have about this. I caught this because I saw Brian Wallace, who is a former executive over at Magic Leap is helming this company now. And the uses for personalization within the store, I think could be like absolutely phenomenal. You could even have reps that aren't in the store talking to people who are in the store.

Phillip: [00:35:39] That's not crazy and dystopic at all. That doesn't worry me at all. That random headless voices are talking to me and only me as I walk around the world. That's not scary.

Brian: [00:35:52] Yeah. This would be great for the car. This is great if you're watching... You could have people sitting on a couch using two different devices without headphones and, you know, car, home, gym... So many places where this could be useful in store if this technology is actually functional and actually works properly. The opportunity for disrupting commerce is insane. Like I am just blown away by this idea.

Phillip: [00:36:28] Yes. Yes, so from a commerce impact I definitely see that there are potential positive uses of all types of technologies.

Brian: [00:36:39] Right. Yeah.

Phillip: [00:36:41] I don't know that I want a whole bunch of Juggalos running around. So that sounds worse, actually. I'd rather have facial recognition than, you know, everyone in like Harlequin makeup walking around the streets trying to defeat facial recognition.

Brian: [00:36:52] Maybe this creates like anti facial recognition, beautification products where like people are painting their faces different things in ways such that...

Phillip: [00:37:04] Yeah, maybe there's a fashion trend that sort of gets born out of this, but I think it also kind of maybe opens the door to, you know. I don't know. I just don't see a world where...

Brian: [00:37:19] You're about to get super dystopic on us?

Phillip: [00:37:20] Yeah, a little bit, but I see a world where, you know, potentially we decide that, you know, our national security is more important than people's freedom of expression and makeup. And maybe one day we decide that we don't want people to be able to wear Juggalo makeup. Maybe one day we decide that people aren't allowed to wear makeup at all.

Brian: [00:37:38] Dude, you are hitting it hard right now. This is about as far future as I think you have gone.

Phillip: [00:37:40] You know that I take things to the very end of the extent of possibility. The thing that makes me concerned is that while there are positive aspects here, there are certainly also negative aspects. And we touch on that stuff with AI all the time. I think in this particular case, AI powers this, and there is definitely a through line. I'm more concerned, getting back to what I was hinting at before, I'm more concerned that people who aren't necessarily being tracked in this way, who are being tracked in this way without their consent, who have no awareness that it's happening, and that once you sort of do apply your consent, that it's retroactive in perpetuity. And any data that we've been gathering on you... For instance, there is a  story that came out recently about the updates to Facebook's GDPR privacy policy updates and how people are surmising how Facebook has been operating for the better part of a decade is whether you have a Facebook account or not, there is a Facebook profile on you in much the same way that we assume that there is a CIA or FBI file in the United States on every human being, that there is a story about you somewhere. Facebook literally does have that.

Brian: [00:39:09] Yeah.

Phillip: [00:39:09] And they know everywhere you've been on the Internet because everyone's using Facebook pixel tracking nowadays because of advertising and they know everywhere that you've been online, potentially even in an incognito mode. And now because of Facebook Live and Instagram, they know everything that you look at when you're in the Facebook or in the Instagram Discovery tab, they know when you click through onto certain hashtags in Instagram. They're building a profile on you, and the day that you decide that you want an Instagram or a Facebook account, you are consenting that every piece of data that they have ever gathered on you, no matter who you are or how long they've been tracking you, will be associated to you. And now any information that you surrender in that process, including your birthday, your gender, you know, the pictures you freely and willingly upload yourself will be used to associate that data back to you and further fill in that profile. And that's useful to advertisers. It might even be useful to you if you're like me. I've found plenty of products that I'm very happy with because of my Facebook account. And, you know, I've had many friendships that have been revived and like there's a lot of positives to the world, but I think that there's a lot of negatives in that I don't like the idea that someone's tracking me for 10 years without my knowledge and associating all that data that they know about me back to one event when I decided I wanted to use their service. And I feel like that's where we're heading with public  surveillance and facial recognition in that one day if I decide that I do want to opt in, that I've opted in retroactively for the rest of my life, and you will know everything about me forever. I think this has broad impact.

Brian: [00:40:56] Especially with the facial recognition.

Phillip: [00:40:58] Especially with facial recognition.

Brian: [00:41:06] That's such a powerful tool, and this can happen without your consent. That's an interesting point because there's going to have to be consent around this. You're going to have to consent to go into a store, and it's not just camera for security use now, it's camera for like we know who you are when you walk in.

Phillip: [00:41:42] GDPR in the real world will not work because just putting a notice.

Brian: [00:41:47] Yeah.

Phillip: [00:41:48] You know, outside the mall, which Brian never goes to. But putting a notice outside of the mall or outside of Macy's that says "You're consenting to facial recognition when you walk in here," actually doesn't do the trick. Because what that has done, in GDPR, that's not allowed. The spirit of GDPR is I should, as a consumer, be able to opt out of you tracking me and still be able to use your service.

Brian: [00:42:11] Exactly. Yes.

Phillip: [00:42:11] That's how it's supposed to work.

Brian: [00:42:12] That is the part right now that I think is going to get really messy. That option is not going to have to be available.

Phillip: [00:42:20] Yeah. And if you look at it, some retail outlets now, they've decided they'd rather just not do business in Europe, then have to comply.

Brian: [00:42:29] AThey're going to have to because look at California. Look at California. Yeah.

Phillip: [00:42:35] This is the story.

Brian: [00:42:36] That's the story.

Phillip: [00:42:37] So this is the story.

Brian: [00:42:38] The story is California passed their own, what's being tagged as, GDPR light legislation. And now similar rules and restrictions are being applied in the state of California as Europe. I expect this to...

Phillip: [00:42:58] And it will come into effect at a much broader in the next couple of years.

Brian: [00:43:00] Yeah. Yes. I expect this to be something that happens in more states. Not all of them. Like maybe not in Texas, but like in left leaning states this is going to happen quickly.

Phillip: [00:43:18] Yeah. And potentially, for you to do business in the state of California. Let's think about what I just said about some retailers deciding not to do business in Europe. We've now bifurcated the Internet. Right? So the Internet used to be no matter where you are, you can access anything on the worldwide web because that's how it works. Now, based on local laws, we've decided that we don't want to provide access to certain countries because it sounds hard, and it's gonna be expensive. So certain countries, you visit a website and you'll get a splash page that says, "Sorry, due to GDPR we no longer allow you to look at our website."

Brian: [00:43:58] Yeah.

Phillip: [00:43:58] That sucks. Can you imagine? Can you imagine? It sounds crazy today, but two years from now, it may not be so crazy that some company decides that they don't want to do business in the state of California. So if you're in California, you're no longer allowed to look at our website.

Brian: [00:44:16] Yeah.

Phillip: [00:44:16] That is terrifying because that's not the spirit of the Web and that's not the spirit of global commerce and global freedom of information.

Brian: [00:44:25] I don't think that's going to havppen. I think that businesses are just gonna have to comply.

Phillip: [00:44:29] You don't see this being challenged in some way? This sounds like the sort of era defining thing that we have to decide as a generation which way we want to go and at what point does California get to determine how the rest of the country and maybe the world gets to do business?

Brian: [00:44:55] I think Europe already determined that.

Phillip: [00:45:00] We can't control Europe, but we can certainly talk about from a federal perspective whether a law like that... We just saw this with the Vertex interview that we did at IRCE. And I anticipate a law like this being challenged at the highest courts in the nation, and we'll have to make a decision. I think that's why who we put into political office and how they appoint judges is a very important thing for global commerce. And, you know, unintended consequences abound.

Brian: [00:45:34] Yeah, it is interesting.

Phillip: [00:45:35] It's crazy.

Brian: [00:45:36] It is interesting. I mean...

Phillip: [00:45:37] Yeah, I'm playing both sides here. I mean, because privacy super important. But I also think that, you know, the states can concoct laws that will further divide our nation's access to retailing and commerce.

Brian: [00:45:53] Well, that's the tricky part. This is the kind of thing where if businesses have to comply with this, there're different laws per state and different levels of privacy consent per state. That's going to be a huge burden on businesses that are selling online. That would be almost everyone now.

Phillip: [00:46:19] I mean, we dumped a bunch of tea into a harbour 200 years ago protesting taxes, and now we have, you know, one of the most complicated intrastate tax codes in the whole world. I think that we'll find ways to manage the complexity with people that are experts in the privacy space and privacy compliance space. And there's likely to be some cost associated with doing business online and managing people's privacy. Maybe we see services that you can pay that will manage it per state privacy complexity.

Brian: [00:46:55] That's actually not a bad idea.

Phillip: [00:46:57] Chris, cut that out, and we'll just make that a business.

Brian: [00:47:03] Yeah. That's actually legit. I don't know, man. Yeah.

Phillip: [00:47:09] Yeah. That's an eventuality that's going to happen one way or another. And there will be, you know, lots of people that will try to manage that. I think it's gonna take a lot of... We're some ways away from it. That's something that's gonna have to happen.

Brian: [00:47:23] We're not that far away from it when the California GDPR light law just passed. This is not that far away. If you're a retailer... It's funny like looking at the effect of GDPR in American business. I don't know how revenue impacting it's been so far. It will be interesting to see once we start see the stats on that. But if you felt like this was revenue impacting, which I actually I tend to think that, you know, I don't think it was that revenue impacting, like it wasn't too heavy of a cost, simply because I don't think that many American businesses did all that much with it thus far.

Phillip: [00:48:08] Really?

Brian: [00:48:09] That's my gut. A few months in, and I think a lot of retailers have been like, "Oh, yeah. That thing passed. I don't even know what I'm supposed to do with this." My point isn't that it won't impact them, but that they haven't really done anything with it.

Phillip: [00:48:29] But they haven't. I mean, what was it, day one or two they went right for the jugular. The Europe Union went for the jugular on some large social media companies and Google. But we're probably a few years out from them turning that firehose toward small and medium sized businesses who have sort of been lax on this. And in that point, at that point, somebody is gonna have to step up, and we're going to find a way to manage the complexities, because mom and pop t shirt shop or, you know, random fashion designer shouldn't need to manage the complexities of digital privacy for them to sell a dress.

Brian: [00:49:15] Yeah.

Phillip: [00:49:15] And that sounds complicated because it is complicated, but it's necessary. And I'm the first one to rally for it. But we shouldn't have to wear a Juggalo makeup for us to maintain our privacy in the United States. That's the final word. If you like, listen to Future Commerce, we want you to go subscribe. Head on over to FutureCommerce.fm. Smash that like and subscribe button. And basically we're everywhere. We are listening to you. We're in your homes. No, I'm just kidding. We're everywhere that you listen to podcasts. You can catch us on any smart speaker device with the phrase "Play Future Commerce podcast." We're also on Spotify and pretty much everywhere else. Oh, iHeartRadio. We're live on iHeartRadio this week. It's kind of fun. So lots of cool stuff happening in the Future Commerce space. Make sure you also sign up for our FC insiders, which is your first ticket into what's happening in the show. We got a lot of stuff coming up here in the summer and in the fall. And we're very excited to announce that we are kicking up a new sponsor. We have a new partnership that we've formed with PayPal to help bring you some interesting content in this space. And we'll talk a little bit more about how PayPal is helping companies of all sizes to be successful and to connect with their customers. So check that out in the next few weeks. That'll be fun. But until next time, Brian, what does it say?

Brian: [00:50:38] Retail tech is moving fast...

Phillip: [00:50:40] And Future Commerce is moving faster.

Brian: [00:50:41] See you next time.

Phillip: [00:50:43] And also no longer employed by Amazon. {laughter} See you next time. Bye.