Smartphone Addiction: the need for digital detox Barclays

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Equity Research 19 September 2018

Sustainable & Thematic Investing

Smartphone Addiction: the need for digital detox Sustainable & Thematic Investing Hiral Patel +44 (0)20 3134 1618 hiral.patel@barclays.com Barclays, UK Emily Morrison +44 (0)20 7773 9080 emily.morrison@barclays.com Barclays, UK Anushka Challawala +44 (0)20 3134 2326 anushka.challawala@barclays.com Barclays, UK

Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA. PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 64.

Barclays | Sustainable & Thematic Investing FIGURE 1 Are you addicted to your smartphone?

Source: Dr. David Greenfield - Founder, The Center for Internet and Technology Addiction (link) – Assistant Clinical Professor of Psychiatry, University of Connecticut School of Medicine Disclaimer: It should be noted that no medical or psychiatric diagnosis can be made solely by a written test or screening instrument alone; this survey is intended for educational and informational purposes only. If your score is on the higher side it would be reasonable to examine whether your use or over-use is creating any problems in work-life balance. If you are concerned about your smartphone use, you may wish to consult with a mental health/addiction professional with expertise in Internet and Technology Addiction (Process/Behavioral Addictions).

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CONTENTS EXECUTIVE SUMMARY .................................................................................... 4 NOMOPHOBIA ................................................................................................... 7 Smartphone addiction................................................................................................................................... 7 The tipping point: separating the good from the bad ....................................................................... 10 Impact on society ........................................................................................................................................ 14 Why is usage becoming an addiction? .................................................................................................. 15 How does persuasive technology work? .............................................................................................. 17

INTERVIEW: DR GRAHAM – FOUNDER OF UK’S FIRST TECH ADDICTION SERVICE ......................................................................................19 Our afternoon at Nightingale Hospital... ............................................................................................... 19

HOW TO SOLVE IT? ........................................................................................20 Timing: Far beyond self-control .............................................................................................................. 20 A role for everyone – Government, tech industry, parents .............................................................. 21 Tech companies must step up on social responsibility .................................................................... 22 An initial step forward has been made... ............................................................................................... 23 The need to embrace ethical design ...................................................................................................... 26 Is regulation the only way? ....................................................................................................................... 30

INVESTOR GUIDEBOOK .................................................................................33 View this as a positive change to the industry... ................................................................................. 34 Sustainability vs. profit: From trade-off to the new norm... ............................................................. 35 ESG framework: Smartphone addiction ................................................................................................ 36 Investor Question Bank .............................................................................................................................. 38 Sector implications...................................................................................................................................... 39 Social Media .................................................................................................................................................. 40 Online Gaming ............................................................................................................................................. 42 Online Gambling .......................................................................................................................................... 47 Telecom Operators ..................................................................................................................................... 50

APPENDIX 1 – COLLECTIVE RESPONSIBILITY ..........................................55 APPENDIX 2 – SUMMARY OF PARENTAL GUIDELINES ........................58 APPENDIX 3 – INTERACTIVE DIGITAL HEALTH LABELS .......................59 APPENDIX 4 – LESSONS FROM THE EAST ...............................................61

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EXECUTIVE SUMMARY The smartphone is increasingly becoming our go-to medium for everyday life, changing the way we interact, work and learn in contemporary society. However, for all the advances smartphones have made in boosting productivity and convenience, smartphone addiction is on the rise. We define this as excessive dependency or obsession that interferes with daily activities and promotes distress and anxiety upon withdrawal. Children are the most vulnerable and are not helped by the rise in persuasive technology1 and the ‘magic of maybe’ thanks to social media and mobile gaming.

Research warns that over-usage can impact adolescent development as well as increase the risk of loneliness, obesity and depression; yet the average age for children owning their first smartphone continues to fall. We acknowledge that not all usage is necessarily bad and is in most cases life-enhancing, but the evidence so far suggests some form of action is required to ensure our smartphone use remains beneficial for society going forwards.

While it’s easy to adopt the ‘everything in moderation’ mantra, this becomes problematic when finding the right balance between risk and reward for smartphone use compared with the more obvious substance addictions like drugs and alcohol. This is likely to persist as our interactions with smartphones become even more tailored to personal needs thanks to artificial intelligence and more immersive as augmented reality moves further into the mainstream. It is also unreasonable to deem that it is solely up to the parents to instil self-discipline, when many might be addicts themselves or unaware of what constitutes healthy usage. We thus view smartphone addiction as a collective responsibility, requiring collaboration across all relevant stakeholders including the government and the tech industry.

For many, Apple is the obvious scapegoat. However, we believe a wider net of responsibility needs to be cast across the broader tech industry including social media platforms, device makers, app developers and online gaming. In recent weeks technology companies like Apple, Google and Facebook have introduced tools to monitor smartphone usage; however, we fear this step forward may not be enough given the overemphasis on time spent rather than the context in which content is consumed and created. The broader need would be for the industry to embrace ethical design and the concept of digital wellbeing within the long-term development of their products and services. This is different from intentionally making products less engaging; rather we believe it would provide tools that discourage addiction by focusing design goals on protection, not simply interaction. This includes providing a safe environment for younger users, policing compliance to mandatory age restrictions and adopting persuasive technology in an ethical manner.

A better understanding of technology addiction could also help steer companies to develop new consumer-facing technology, including the rise of EdTech. We believe acting quickly and effectively would be the lesser of two evils when considering the impact intrusive regulation, additional shareholder pressure or societal backlash could have if action is not taken at a more granular level.

Why read this report?

The objective of this report is to highlight why the tech industry needs to take a wider view of its responsibility for device usage, particularly the impact persuasive technology can have on children following our recent deep dive into generational behaviour – Generation Z: Step aside Millennials (28 June 2018). We highlight ways in which smartphone addiction could be addressed (Figure 2) and share our findings from an interview with Dr Richard Graham, who launched the UK’s first tech addiction service at Nightingale Hospital in London.

We conclude that investors with exposure to consumer-facing technology will benefit from understanding the impact smartphone addiction is having on societal wellbeing. This may require a shift in how success and user engagement is measured in the industry, fuelled by the growing prominence of ESG analysis in mainstream investing. In conjunction with our sector analysts (internet & social media, online gaming, gambling, telecom operators), we outline sector implications via our Investor Guidebook (page 33) including questions for management and what we consider is an appropriate ESG framework to evaluate companies trying to mitigate the risks associated with smartphone addiction.

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This type of technology is designed to change people’s attitudes and behaviours through persuasion and social influence, but not through coercion (Fogg - 2002)

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FIGURE 2 Smartphone Addiction

Source: Influence Central’s Digital Trends Study (2016), Deloitte’s 2017, Mobile Consumer Survey (2017), Steve Jobs was a low-tech parent – The New York Times (2014), Barclays Research

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Barclays | Sustainable & Thematic Investing FIGURE 3 A day in the life of a smartphone…

Source: Deloitte Global Mobile Consumer Survey – UK Edition (May-June 2016) Note: Respondents for which a particular activity does not apply have been excluded from this analysis e.g. respondents who do not work have not been asked if they use their phone at work). Weighted base: Respondents who own or have access to a smartphone – 3,251

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NOMOPHOBIA We are so dependent on our smartphones that we often joke about being addicted without appreciating that overuse and dependency are affecting many people around the world already. Mandy Saligari, a Harley Street rehab clinic specialist, believes screen time is often overlooked as a potential vehicle for addiction particularly for young people. She has commented that giving a child a smartphone is like “giving them a bottle of wine or a gram of cocaine”2. We acknowledge history is fraught with several episodes of technophobia (printed press, TV, video games); however, we believe smartphones represent a more complex case given their utility is extremely personal and goes far beyond just being able to make a phone call.

Experts believe children will be the most vulnerable to becoming distracted, alongside the rise in persuasive design, which has embedded the concept of FOMO (fear of missing out) and the need to curate a perfect life on social media at a young age. We acknowledge that not all usage is necessarily bad and is in most cases lifeenhancing, but the evidence so far suggests some form of action is required to ensure our smartphone interactions remain healthy and benefit society as a whole.

In this chapter we first define smartphone addiction before analysing the role of biology and the use of persuasive technology. Using a range of sources, we will then outline the impact smartphone addiction is having on society today, both mentally and physically.

Giving your child a smartphone is like "giving them … a gram of cocaine" – Mandy Saligari, Harley Street rehab clinic specialist

Smartphone addiction The NHS takes a broad view: Addiction: Not having control over doing, taking or using something to the point where it could be harmful to you.

Addiction is most commonly associated with gambling, drugs, alcohol and nicotine.

But it is possible to be addicted to just about anything including work, the internet, solvents and shopping.

Smartphone addiction is a term that entered our cultural lexicon relatively recently, alongside the growing fear that people are submersing their lives deeper into technology without understanding the broader implications its use is having on their health and society.

It is colloquially known as Nomophobia – an abbreviation for “no-mobile-phone-phobia” – the irrational fear of being without your mobile phone (UK Post Office publication - 2008), and Phubbing – the act of snubbing social interactions by focusing on your phone instead (accepted by the Oxford English dictionary in 2016).

There is still debate amongst medical professionals as to whether “addiction” is the right word to use given the distinction (for some) between substance and behavioural addiction.

If we were to stay true to the defined medical term used by many, very few adults suffer from genuine addiction to their smartphones today. However, the term addiction is now used more casually thanks to the media, with the concept of addiction being symptomatic of excessive dependency or obsession that interferes with daily activities and promotes distress and anxiety upon withdrawal.

Source: NHS Choices

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Mandy Saligari – Speaking at the Highgate School – Developing Teenager Conference (2017)

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Barclays | Sustainable & Thematic Investing As a relatively new subset of addiction, smartphone use does not easily fit into the standard classifications provided by the American Psychiatric Association in the latest Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5, 2013). The DSM has only recognised compulsive gambling as a behavioural addiction, considering the rest (e.g. video games, exercise, food, shopping, work and the internet) as impulsive disorders.

However, the research already done on the subject has helped to develop a better understanding around the symptomatology of what problematic smartphone use looks like (Figure 4).

FIGURE 4 Symptomatology of problematic smartphone use…

Source: Cell-Phone Addiction: A Review – Front Psychiatry (2016), Barclays Research

Why focus on smartphones?

The concerns surrounding the rapid ascendance of addictive technology are hardly unique, with a long history of ‘technophobia’ or people becoming distrustful of technology that radically transformed society (Figure 5). Although the feature phone and the personal pager made society more comfortable with the introduction of the smartphone and more specifically the iPhone in 2007, what was underestimated at the time was its eventual pervasiveness alongside the rise in portable connectivity and its ability to infiltrate our lives beyond just being able to make a phone call.

Put differently, our smartphone is now the go-to medium for everyday life. We use it to check the time, set our alarm, read the news, play games, listen to music, stream TV, take a photo/video, conduct personal banking, check emails, navigate while travelling and for many other activities. Smartphones have replaced multiple devices we would have needed a decade ago, including watches, radios, TVs, computers, cameras, video recorders, maps, newspapers, gaming devices, and magazines.

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The smartphone is now the modern security blanket...

However, even beyond such utility-based functionality, the rise in social media (Facebook, Instagram, Snapchat, YouTube and Twitter) and messaging apps (WhatsApp, WeChat) have significantly changed the way we use our smartphones. More specifically, they have changed the way we interact with each other both consciously and subconsciously. This is particularly true for the Generation Z population (ages 9-23), most of whom did not experience the world before smartphones and social media. Our thematic deep dive into Generation Z and Millennials – Gen Z: Step aside Millennials (28 June 2018) – highlights the role that FOMO (fear of missing out) has played in driving social anxiety and social affirmation amongst the younger population.

Furthermore, we will likely use our smartphones even more as the industry gravitates towards AI-derived personalisation and augmented reality. Therefore, our analysis in this report focuses on the role of the smartphone as a means to deploy the rise of persuasive technology.

FIGURE 5 Telephone, personal computer, TV, the internet…all have been targets of technophobia in the past…

Source: Len Wilson – Examples of fear and suspicion of new technology

Case Study: Steve Jobs 2007 Keynote – Birth of the iPhone “Every once in a while, a revolutionary product comes along that changes everything...one’s very fortunate if you get to work on just one of these in your career. Apple’s been very fortunate. It’s been able to introduce a few of these into the world. In 1984, we introduced the Macintosh. It didn’t just change Apple, it changed the whole computer industry. In 2001, we introduced the first iPod, and it didn’t just change the way we all listen to music, it changed the entire music industry.

Well, today, we’re introducing three revolutionary products of this class.

- The first one: is a widescreen iPod with touch controls.

- The second: is a revolutionary mobile phone.

- And the third is a breakthrough Internet communications device.

So, three things: a widescreen iPod with touch controls; a revolutionary mobile phone; and a breakthrough Internet communications device. An iPod, a phone, and an Internet communicator. An iPod, phones… are you getting it?

These are not three separate devices, this is one device, and we are calling it iPhone.”

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The tipping point: separating the good from the bad The majority have a healthy relationship with their phone...

The majority of us have a healthy relationship with our smartphones and are mindful of how screen time can potentially impact our personal lives or the quality of our social interactions. In less than a decade, smartphones have become ingrained into nearly every aspect of our lives. It has helped to drive the historic surge in communication, connectivity and convenience around the world, and for many it has become the go-to portal for information. While the iPhone wasn’t necessarily the first smartphone to exist, it leapfrogged the competition when it was launched in 2007. The iPhone keynote by Steve Jobs was considered by many as the birth of the smartphone revolution, with few industries or societies left unchanged.

...Some are slaves to the smartphone There’s a dramatic difference between treating the smartphone device like a tool that improves life and viewing it as an appendage. Experts in the field use a variety of separators to distinguish the two, with the simple ‘good or bad’ analogy often referred to as using our device consciously, with purpose, or using it from a place of unconsciousness. To further complicate matters, there is also no consensus of what constitutes healthy usage, and thus we refer to Griffiths (2005) to distinguish the difference between being highly engaged from being addicted. That is, “excessive use does not necessarily mean addiction, and the difference between a healthy enthusiasm and addiction is that healthy enthusiasms add to life, and addictions take away from it.”

Where is the tipping point?

Evidence suggests usage for some has already reached the tipping point, where one is unable to control his or her smartphone use or the negative consequences from its overuse. This is being observed at the individual level but also at the societal level with the distinction between liking and wanting becoming increasingly blurred. This switch from liking to wanting is referred to by Grover et al. (2011) as the “inflection point.” This tipping point signals a shift from a previously benign everyday behaviour that may have been pleasurable with few harmful consequences to an addictive behaviour where wanting (physically and/or psychologically) has replaced liking as the motivating factor behind the behaviour.

FIGURE 6 Tipping point: Living in service of our devices or leveraging tools to make our lives better?

Source: Barclays Research

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Case Study: Do the mobile apps we use the most make us unhappy?

Moment – a free Apple iOS app that tracks user’s screen time and helps them limit their app usage – recently partnered with the Centre for Humane Technology to determine which apps leave us happiest and which leave us unhappiest. The goal was to encourage more self-awareness about app use and offer some impetus to change negative habits. For the project, Moment asked its users “Are you happy with your time spent”?

We summarise the results in Figure 7 and highlight the following key takeaways:

• The apps that yield the most “Happiness” are weather, podcasts and calendar. The apps that yield the most “Unhappiness” were Facebook and Instagram, yet users spent the most amount of time on them.

• On average, comparing between “Happy” and “Unhappy” amounts of usage of the same apps, their unhappy amount of time is c.2x the happy amount of time.

• Within the assessment, Moment sought to find the happiness breaking point for each app. In the case of Facebook, Moment found that point to be 20 minutes a day.

Such moderate usage was found to even boost a user’s mood, but 45 minutes veered into unhappy territory.

FIGURE 7 App “Happiness” and “Unhappiness” reported by Moment App users Average daily use in minutes over last three months

% of users who feel happy with app

Average daily use in minutes for: happy

Average daily use in minutes for: unhappy

100%

200 180

80%

160 140

60%

120 100 80 60

20%

Min

40%

40 20

Most Happy

0

Weather Podcasts Google Calendar Calculator Calendar Spotify Amazon Music Kindle Camera Google Maps Google Photos Moment Waze Music Maps The Weather Contacts Notes Outlook FaceTime Bible Clock Gmail Siri Photos Mail Settings Fitbit Messages App Store Phone Uber Amazon Google LinkedIn MyFitnessPal Messenger News Pinterest Fortnite Tumblr Pokémon Go WhatsApp Safari Chrome Netflix Home & Lock Screen Snapchat YouTube musical.ly Twitter Reddit Tinder Facebook WeChat Recently Deleted Apps Instagram

0%

Most Unhappy

Source: Moment App Survey results shared by Kevin Holesh, July/August 2018 – 20,487 users

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Evidence suggests the societal cost of digital distraction is growing...

Bank of England: “Is the economy suffering from the crisis of attention?” One of the key findings from a recent post on the Bank of England’s blog on productivity and smartphone usage (24 November 2017) was that we are more distracted than ever as a result of the battle for our attention. A study by the US Chamber of Commerce Foundation (12 November 2012) found that workers typically spend one hour of their workday browsing social media, rising to 1.8 hours for Millennials. The total output lost is greater than those figures because office workers typically take around 25 minutes to recover from interruptions before returning to their original task, the blog’s author Dan Nixon says.

Distractions also appear to reduce the quality of work: an influx of emails and phone calls is estimated to reduce workers' IQ by 10 points - "equivalent to losing a night's sleep."

No free time: At the 2017 TED conference Adam Alter, the NYU psychologist, presented a collection of three bar graphs showing data for how people in 2007, 2015, and 2017 spend an average workday. The amount of time we spend on sleep, work and survival has remained fairly constant over time; however, how we spend our free time has changed dramatically (Figure 8). A separate study by Deloitte found smartphone behaviours are distracting users, harming their relationships with others and even potentially endangering their health or that of other people’s (Figure 9).

FIGURE 8 Living in service of our devices: screen time is eating into our free time…

The average 24-hour workday

FIGURE 9 Phone use that is distracting: % of smartphone owners who use their phone during different activities 80% 70% 60%

2007

50% 40% 30%

2015

20% 10% 0%

2017

Sleep

Work & Commute

Survival

Source: Adam Alter – 2017 TED conference

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Personal

Screentime

While eating at While sleeping home with family or friends

Adults

While crossing the road

While driving

18-24 years olds

Source: Global Edition: Deloitte’s Global Mobile Consumer Survey - 2017 Weighted base: All adult smartphone owners (34,588), 18-24 (5,351)

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...People are starting to become more mindful An annual study by Deloitte estimates 45% of global adult smartphone users in 2018 will worry they are using their phones too much for certain activities, and 45% of all adult smartphone users will try to limit their phone usage in various ways – from employing hightech apps that measure or limit usage to sticking their device in a drawer. Surprisingly, Deloitte predicts this concern will be the highest for young people who have smartphones, with nearly two-thirds of 18- to 24-year-olds around the world feeling they are using their devices too much, and with over half trying to control usage.

FIGURE 10 Phone use and possible over-use in 2017, by age 60%

Adults

18-24 year olds

40%

20%

0% Look at phone >50 times/day

Use phone too much

Try to limit usage

Source: Global Edition: Deloitte’s Global Mobile Consumer Survey - 2017 Weighted base: All adult smartphone owners (34,588), 18-24 (5,351)

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Impact on society Research shows the overuse of smartphones is impacting our health, both mentally and physically. It also has the potential to impact the quality of our social interactions and performance capabilities, both academically and in the workplace. Based on a range of sources, we summarise our findings in Figure 11.

FIGURE 11 The overuse of smartphones is beginning to impact our health, both mentally and physically…

Source: Barclays Research, LG - Low Battery Anxiety Survey (2016), Fortune (2018), New Forest National Park Authority (2014), Telegraph (2017), The University of Sheffield (2017), Scope (2014), Royal Society for Public Health – #StatusofMind, University of Pittsburgh (2016), Cheung, Celeste & Bedford, Rachael & Saez de Urabain, Irati & Karmiloff-Smith, Annette & Smith, Tim - Daily touch screen use in infants and toddlers is associated with reduced sleep and delayed sleep onset Scientific Reports (2017), The Vision Council – Digital Eye Strain Report (2016)

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Why is usage becoming an addiction?

1) The age at which children get their first phone is declining...

We live in a hyper-connected world, which means internet-enabled devices are everywhere, e.g. smartphones, tablets, personal laptops, desktop computers, video gaming, and connected TVs. Not only can we do more with each device, children are being introduced to technology a lot younger than previously. Figure 12 shows the average age for a child getting their first smartphone is now 10.3 years old, according to a study in the US in 2016 (vs. 12 in 2012).

In the UK, one in four children under the age of six now has a smartphone according to a survey conducted by musicMagpie (2018) after they saw a +300% y/y increase in the number of customers purchasing refurbished phones as the ‘first phone’ for their child.

However, the majority of parents in the study stated 11 was the ‘acceptable’ age for children to have their own phones. According to the survey, almost half of children under the age of six spend as much as 21 hours per week – an average of three hours per day – on their phones, with 80% of parents not limiting the time their children spends using these devices.

FIGURE 12 Ubiquity of smartphones

Source: Ericsson Mobility Report (2017), MacRumors (2018), IAB (2016), Influence Central (2016), Business Insider (2018)

2) The rise in persuasive technology – engineered to be irresistible “God only knows what it’s doing to our children’s brains” Sean Parker (2017) – Early Facebook investor

There is a hidden race for our attention amongst the tech industry, driving the use of persuasive technology that is intentionally engineered to become addictive by taking advantage of our psychological vulnerabilities. Persuasive technology works by deliberately creating digital environments that users feel fulfil their basic human drives - to be social or obtain goals - better than real-world alternatives (Medium – 11 March 2018). We summarize some of the techniques used by technology companies today in Figure 13.

In 2017 Sean Parker (early Facebook investor/Napster co-founder) commented at an Axios event in Philadelphia how he and other early architects of Facebook designed it to “consume as much of your time and conscious attention as possible.” Parker describes this as a “social-validation feedback loop” that works by “exploiting a vulnerability in human psychology” (AdAge – 9 November 2017).

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Barclays | Sustainable & Thematic Investing What’s more, he said that he and other Silicon Valley pioneers like Mark Zuckerberg and Instagram co-founder Kevin Systrom “understood this consciously. And we did it anyway.”

FIGURE 13 Technology is not neutral

Source: CNN (9 November 2017), Guardian (28 February 2017)

We outline some of the features identified in Figure 13 in further detail below:

• Instagram – notifications and stories: If a user has enabled push notifications on Instagram, they will receive a message about any number of items: someone’s first story on Instagram, when a Facebook friend has joined the platform, or when one of the people you follow on Instagram is filming live video. While a user has the ability to customise and limit these notifications, the default is to notify users about everything.

• Twitter – spinning wheel: To refresh the Twitter newsfeed, the user has to swipe their finger downwards to activate the spinning wheel, which indicates that the app is loading more content. The spinning wheel has been likened to a casino wheel by app experts (Business Insider – 17 February 2018).

• LinkedIn – social reciprocity: When a user sends someone an invitation to connect, directly below the invitation is a list of people that you could connect with. According to Tristan Harris, the former Google Design Ethicist, “LinkedIn turns your unconscious impulses (to ‘add’ a person) into new social obligations that millions of people feel obligated to repay.”

• Snapchat – Snapstreaks: A “streak” is a counter within the Snapchat app that keeps track of how many consecutive days you and a friend have sent a Snap to each other. If you don’t Snap the person within 24 hours, the streak ends. While there is no reward for maintaining a streak beyond the number itself, for many it’s simply a bragging right to have maintained a streak for years.

The arms race for people’s attention The industry has deployed a variety of features mentioned above, which has further entrenched their underlying business model – advertising. Because social media platforms are typically free, they rely on revenues from advertising to make a profit, which has created a so-called arms race as companies try to gain and maintain consumer attention. With only 24 hours a day, “the big internet companies know more about you than you know yourself, which gives them high power to influence you, to persuade you to do things that service their economic interest. Facebook, Google and others compete for each consumer’s attention, reinforcing biases and reducing the diversity of ideas to which each is exposed” – Roger McNamee (early Facebook/Google investor) Business Insider - 2017.

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How does persuasive technology work?

“I feel tremendous guilt…

The short-term, dopaminedriven feedback loops we’ve created are destroying how society works.

[There’s] no civil discourse, no cooperation; [only] misinformation, mistruth. And it’s not an American problem – this is not about Russian ads.

This is a global problem” Chamath Palihapitiya (2017) – Former VP of User Growth at Facebook

Intermittent variable rewards One of the ways persuasive technology works is by linking an action to an intermittent variable reward – similar to a slot machine. You pull a lever and immediately receive either a reward (a prize) or nothing. Addictiveness is then maximised when the rate of reward is most variable according to The slot machine in your pocket – Tristan Harris (June 2016).

This is similar to a smartphone when you check to see whether you have any notifications or “pull to refresh” your newsfeed – you never know when you will get the next reward and it’s delivered at the perfect time to foster user engagement. This checking eventually becomes habitual and users will still check for the chance of a social reward even without the initial alert. Even if users do not always receive the social reward (i.e. it is variable), checking will continue to happen if the reward is received often enough (Figure 14).

FIGURE 14 Notifications lead to habitual checking behaviour…

Source: Hypernatural Monitoring: A Social Rehearsal Account of Smartphone Addiction (2018)

Social approval This is where users are persuaded to behave in a particular way to obtain the approval of others. The need to belong, to be approved by or appreciated by our peers are among the strongest human motivations according to Tristan Harris, with certain demographics more vulnerable than others. In the context of social media, this is where users turn to Facebook, Instagram or Snapchat for validation. For example, when we upload a new profile photo, Facebook knows in that moment we are more vulnerable to social approval and thus can rank this higher in the newsfeed to improve the chances of it being liked or commented on (and thus a new notification is born).

Instant interruption vs. “respectful” delivery Driven by the interest to heighten the feeling of urgency and social reciprocity, companies know that messages that interrupt people immediately are more effective at getting people to respond compared to messages delivered asynchronously. For example, Facebook automatically tells the sender when you have seen their message, which makes you more obliged to respond immediately.

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Case Study: Dopamine – the chemical of addiction Dopamine is a neurotransmitter that helps control the brain’s reward and pleasure centres. Dopamine also helps regulate movement and emotional responses, and it enables us not only to see rewards, but to take action to move towards them (Psychology Today). The human body seeks rewards of all sorts, which can sometime result in habits forming. Activities such as drugs, sexual intercourse, overeating, gambling, shopping and other seemingly unrelated activities are all known to trigger the release of dopamine.

In the case of ‘typical’ substance addiction, the National Institute on Drug Abuse says most substances affect the human brain’s ‘reward circuit’ by flooding it with dopamine.

The overstimulation of this reward circuit causes the pleasurable ‘high’ which leads to the person seeking this feeling again and again. Over time as the person continues to use the substance, the brain adjusts to the excess dopamine by making less of it and reducing the ability of the reward circuit cells to respond to it. As a person’s ‘tolerance’ to the substance increases they may increase their dosage in an attempt to recreate the same level of ‘high’.

Recent articles 3 have been calling tablets, smartphones and gaming consoles “electronic cocaine” and “digital heroin” owing to the impact they have on dopamine levels. We must clarify while dopamine has a role in addiction and plays a major role in reward and pleasure; it’s not the cause of addiction as there are several other biological, psychological and sociological factors to consider.

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“Electronic cocaine” – Huffington Post ( 25 April 2017), “Digital Heroin” – New York Post ( 27 August 2016)

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INTERVIEW: DR GRAHAM – FOUNDER OF UK’S FIRST TECH ADDICTION SERVICE Our afternoon at Nightingale Hospital...

Dr Richard Graham is a Consultant Child & Adolescent Psychiatrist at the Nightingale Hospital and former Clinical Director of the Adolescent Department at the Tavistock & Portman NHS Foundation Trust. He founded the UK’s first dedicated Technology Addiction Service for Young People at the Nightingale Hospital in 2010. We went to the Nightingale Hospital in London to ask Dr Graham for his views on technology addiction and what can be done about it. Below we provide the highlights from the transcript of that interview.

Addiction as a term is not uncomplicated…“The term addiction is not uncomplicated; however, I have yet to come across a word that captures the essence of a loss of control within the technology realm. We were wary about using the term addiction, given its past use as a judgemental term for something seen as morally bad. But for the public, it was a term that made sense, and indicated someone’s use of technology was out of control and having an impact on their life.

Don’t underestimate the intellectual capacity of adolescents...

“We have to be cautious about treating children and young adults as if they don’t know what is going on. If we go to the world of medicine, we often talk about capacity and whether the child is mature enough to make decisions. Children are a lot more aware and sophisticated when it comes to their footprint and how platforms treat them, and if the Luddites were ever to emerge again they would be young this time not old.”

I often refer to the work of Griffiths (2005) when he says the difference between excessive enthusiasm and an addiction is that healthy enthusiasms add to life whereas addictions take away from it. Griffiths also describes the 6 symptoms that have to be present for a diagnosis of addiction, which I was seeing in my work. One of these is salience. That is, when the particular activity becomes the most important one in the person’s life. A recent study found a large majority are still thinking about their phones when it is switched off, and when you are thinking about your phone, you are not able to think about other important issues.”

A significant percentage of usage is entrepreneurial, embrace it...“In a world where our educational curriculum and career advice is not attuned to the present, children are looking to YouTubers and Instagrammers as role models. There is a need to stop thinking about time spent on our phones as simply entertainment or media consumption. We need to give children opportunities where they can use their skills in a positive way, so that they continue to learn and flourish. Having a sense of purpose is an important part of wellbeing. Restriction alone takes that sense away from you.”

Technology addiction is a public health issue… “There is some evidence that suggests screen time is already a public health matter. Our lives are increasingly intertwined with technology, and this is going to be more of an issue as virtual reality, voice assistants and the IoT are introduced.”

Social media is like a utility, we need more regulation…“I do think we are at the point now, especially after Cambridge Analytica, where social media needs to be regulated. This is not necessarily because of the privacy and data issues that usually get mentioned around GDPR, but because people are increasingly living through them. You trust the platforms to keep safe your most personal moments or memories. That is why post-Cambridge Analytica you can’t delete Facebook – it holds your life. Device makers, app developers and the content providers also need to be held accountable.”

Underage usage…“Underage usage and the need for age verification exists in many other areas. For example, online gambling is able to rely on the credit card companies to police this upon registration. Parents already have an idea of the necessary maturity for things like cigarettes, alcohol and driving; however, we do have a major problem with technology in the sense as to what is deemed appropriate at what age.”

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Quality and quantity go hand in hand, active usage is key…“We have to be careful when conceptualising how much usage is appropriate, and whether or not ‘time’ is the right indicator to follow. I believe it’s a mix of both quantity and quality and one that needs to be carefully considered given that a few years ago even a Harry Potter book would have kept a child up all night. The American Academy of Paediatrics’ latest revision (no screen time under 2 years, only 2 hours a day for kids 2 years and above) has caused some concern within the research domain; however, it does provide a helpful starting point. I particularly like their Family Media Plan and if such principles were embedded in an easy-to-use app, it could help parents set limits, and also give them ideas for offline activities.

Ultimately we need usage to be beneficial, otherwise we can feel defeated and passive usage takes over. E.g. I’ll just watch another one.”

My utopia…“Technology should give us a greater sense of agency and purpose, as well as the confidence to remain in control. We should be able to use the creativity that technology provides in a way that enhances our lives, rather than becoming subservient to it. I am very keen to further the idea of digital wellbeing, as well as resilience and inclusion to ensure we reach an appropriate blend between online and offline.”

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HOW TO SOLVE IT? We acknowledge asking tech companies to remedy smartphone addiction may seem counter-intuitive; however, taking a long-term view on the health of its users will be the lesser of two evils when considering the impact more intrusive regulation or societal backlash could have if action is not taken at a more granular level. They also have the understanding and the critical mass to deliver the necessary change.

To ensure this is done ethically and in the interest of society overall, additional guidance from the government may be required. This would help avoid a scenario where we are living in the service of our devices rather than leveraging these tools to make our lives better (Arianna Huffington – 2018).

While Apple is definitely the smartphone pioneer, that doesn’t mean the blame should fall squarely on its shoulders given that mobile technology is not inherently addictive. It is the use of persuasive technology and the means by which they are deployed on the smartphone that makes them addictive. Therefore, all makers of consumer technology (including social media platforms and mobile app developers) have some form of role to play in remedying smartphone addiction.

In this chapter we explore how smartphone addiction could be addressed by the technology industry, the government and parents. We view this as a collective responsibility; relying on self-control is unlikely to deliver results as smartphone usage becomes even more enticing over the coming years.

Timing: Far beyond self-control The rate at which we submerse ourselves into both the smartphone hardware and its associated technology shows no sign of slowing down. Usage is likely to intensify over the coming years as its capabilities increase, and we believe the following two factors are worth highlighting: 1)

Artificial Intelligence will make devices more personalised: Artificial Intelligence has the potential to make the interactions with our smartphones more personalised and more targeted. While you could argue this will make your interaction with smartphones more efficient, the negative side is your smartphone will become smarter. It will be able to recognise what keeps you engaged and support this with indirect prompts to maintain your attention.

For example, an internal Facebook report leaked last year revealed that the company can already identify when teenagers feel “insecure”, “worthless” and “need a confidence boost”. Such granular information is “a perfect model of what buttons you can push in a particular person” (Guardian – 1 May 2017).

2)

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AR/VR – the rise in immersive technology: Apple’s CEO has been fairly open about his aspiration to make the iPhone a portal for augmented reality (AR) applications in the future. As AR applications become more mainstream (and not just for gamers), such immersive use cases are likely to lead to increased smartphone usage given the potential to customize them to your particular feelings and desires. The most notable experience so far has been with the augmented-reality game Pokémon Go where gamers reached a state of being not fully conscious of their behaviour and risks around them (Psychology Today – 12 July 2016). We should emphasise not all smartphone use is equal, and for most instances will remain life-enhancing for the user. Our focus is on minimising the amount of time it displaces more productive or meaningful activities such as sleep, work and social interactions.

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A role for everyone – Government, tech industry, parents A collective effort is required by society in order to prevent smartphone addiction from becoming a public health crisis, with involvement from schools/universities, parents, the technology industry and the government. We summarise some of the ways each relevant party could respond in Figure 15, with a more detailed explanation in Appendix 1.

FIGURE 15 Parents are the most vulnerable, and require the government and tech industry for guidance‌ Government Regulation: To ensure the technology industry is developing products that are ethical and considerate of the use by vulnerable groups, e.g. children Digital literacy: Guidance on what a healthy, moderate digital life looks like Education campaigns: Government-led advertising campaigns raising awareness of digital nourishment, e.g. TV campaigns, posters Digital health labels: Similar to nutritional guidance, mandatory labels on products.

Endorsing an equivalent to a weighing scale to show whether or not activity is too much Mandatory phone registration: Limiting smartphone registration to children over a certain age Digital detox clinics: Offering support for technology addiction on public health care systems

Tech Industry Embedding the age of the user in initial phone set up: The age would drive what capabilities the phone has, including screen time, hours of the day the phone can be used and availability of social media services and in-app purchases Monitor and enforce controls over underage usage: Collaborate with governments and identity records, with regular updates on the number of accounts removed/queried in financial disclosures Less persuasive design: Convert intermittent variable rewards into less addictive, more predictable ones with better design

Parents/Schools Parents Oversight: Using parental control within apps/devices to limit and monitor usage Lead by example: Making it a family-wide movement, not just for the children School Education: Similar to sex education, focusing on digital literacy and digital nourishment Banning: Taking action against mobile phones during school hours, unless an emergency (similar to France)

Itemized/tracking metrics: Mandatory requirement to provide daily usage statistics via push notification or dashboard apps Parental control: Greater awareness of the parental control in the home menu, linked to itemized/tracking metrics Flow optimisation/ prioritisation: Using AI, devices could learn to work out which notifications are truly urgent and which are not – respectful delivery

Source: Barclays Research

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Tech companies must step up on social responsibility Interviews with Steve Jobs, Bill Gates and other tech elites consistently reveal that parents within the tech industry are strict about technology use, especially when it comes to their children. To safeguard their children, tech sector parents are even sending them to anti-tech schools, including the Waldorf School of the Peninsula, where 75% of students are believed to be the children of Silicon Valley executives (Business Insider – 23 March 2017). The school’s Media & Technology Philosophy states “Waldorf educators believe it is far more important for students to interact with one another and their teachers, and work with real materials than to interface with electronic media or technology.”

We summarise comments that have been made by influential people within the technology industry in Figure 16. This disconnect between their public and private lives suggests the creators of such technology are aware of the issue, yet, in our view, are still not taking enough responsibility to address the impact addiction is having on the wider society.

FIGURE 16 Public technocrats vs. private technophobes

Source: The New York Times (2014), Boston (2017), Inc (2017)

Former employees are pushing back...

Several former employees have openly addressed how the industry is fully aware of the development of addictive technology. Tony Fadell – the father of the iPod and former Nest CEO – has become one of the loudest voices pushing Apple, Facebook and other big tech companies to give users the tools to monitor and limit their screen time. Fadell addressed the issue of screen time using a nutritional analogy: “We need a ‘scale’ for our digital weight, like we have for our physical weight” (Wired – 14 April 2018).

Another example is the non-profit Time Well Spent movement founded by a former Google employee (Tristan Harris), which campaigns for change as it seeks to reverse what they call the “digital attention crisis” caused by technology companies. Harris alongside other former Facebook and Google employees have come together to form the Center for Humane Technology (www.humanetech.com) to lead an anti-tech addiction lobbying effort to pressure companies into making their tech less addictive.

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An initial step forward has been made...

Refer to Appendix 2 for a summary of parental guidelines

In January 2018, Apple received an open letter from two activist investors (Jana Partners and California State Teachers’ Retirement System) calling on the company to do something about smartphone addiction among children and teenagers.

“We have reviewed the evidence and we believe there is a clear need for Apple to offer parents more choices and tools to help them ensure that young consumers are using your products in an optimal manner. By doing so, we believe Apple would once again be playing a pioneering role, this time by setting an example about the obligations of technology companies to their youngest customers.” Open letter – 6 January 2018 Apple responded by introducing Screen Time in June 2018 during WWDC, which was then followed by Google introducing its Digital Wellbeing controls later that month. With the benefit of scale, it was encouraging to see both parties as hardware providers take the initial step forward, and this was more recently emulated by Facebook and Instagram in July with the launch of “You’re all caught up” and “Your Activity”. All of the features introduced so far intend to give people a better understanding of (and control over) how they use their phones. The features are part of the “Time Well Spent” movement, the work of Tristan Harris, a phrase popularised in 2017 to address concerns over screen addiction.

Hardware providers (Apple – Screen Time, Google – Digital Wellbeing) As both smartphone manufacturer and developer of mobile operating systems, Apple and Google have taken the lead in addressing smartphone addiction within the technology industry so far. We summarise Apple’s Screen Time and Google’s Digital Wellbeing in Figure 19 and provide screenshots of Apple’s offering in Figure 17. In principle, they are tools which have been designed to reduce interruptions and manage screen time by providing users with information on how they’re using their time. To their advantage both parties have scale and thus it’s easier to instigate change, with Apple’s iOS and Google/Android operating systems representing 99.6% of the smartphone market today.

According to Wired (6 June 2018), Tim Cook recently commented, “We’re in a very unique position because we have never been about maximising the number of times you pick it up, the number of hours that you use it….The user is our focus. And so our question is always, what is in their best interest?” That being said, both Screen Time and Digital Wellbeing have received mixed reactions given there is more to the subject field than just setting time limits.

FIGURE 17 Apple Screen Time – Activity reports, App Limits, and new “do not disturb” and notification controls

Source: Apple (Screen Time – June 2018)

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Social Media (Instagram - “You’re all caught up”, Facebook - Wellness Dashboard) In January 2018 Facebook announced changes to its News Feed, which included changing the filter to prioritise what friends and family share, while reducing the amount of advertising content from publishers and brands. This shift was likely to mean that the time people spend on Facebook and some other measures of engagement would go down in the short term, with shares falling 4% on the day (vs. Nasdaq +1%) (Reuters - 12 January 2018).

In July 2018 Instagram launched its “You’re All Caught Up” feature, which is designed to let users know when they’ve viewed all new posts from the last 48 hours. Instagram’s CEO Kevin Systrom – commented “any time should be positive and intentional ... understanding how time online impacts people is important and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”

More recently, Facebook and Instagram launched a “Wellness dashboard” – tools that let mobile users track and manage how they spend time on social media including an activity dashboard that shows the amount of time they spend on the app, a timer than reminds them when they’ve hit a self-imposed limit for app use and an option to limit notifications.

The press release outlined how Facebook wants to give “people more control over the time they spend on our platforms and also foster conversations between parents and teens about the online habits that are right for them.”

Similar to Apple and Google, though an initial step forward has been made, we fear the particular focus on time does not address the underlying issue – the use of persuasive technology.

FIGURE 18 Facebook – Your Time on Facebook

Source: Facebook (July 2018)

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Barclays | Sustainable & Thematic Investing FIGURE 19 Technology Industry - what has been introduced so far?

Apple –

Do Not Disturb: Management tools which help people stay in the moment during times like studying, meetings or dinner.

Screen Time

Bedtime mode: Dimming the display and hiding all notifications on the lock screen until prompted in the morning.

June 2018

Notifications: Gives users more options for controlling how notifications are delivered. It tracks things like which apps you use, how often you pick up your phone and how frequently you receive notifications. Once a week, Screen Time collects that data into a report to provide a summary of usage. It also lets you set limits on how much time you spend in specific apps. After you have hit your quota, your phone will block the app from opening.

Google –

Android

Digital Wellbeing

App dashboards: Daily view of the time spent on your phone, how frequently you use different apps, and how many notifications you get.

May 2018

Personalized updates: More control over the alerts you use, what they look like and how often you see them.

Time spent: The App Timer lets you set limits for how much time you use your apps. When you’ve reached that limit, the app icon is greyed out for the rest of the day.

Disconnect more easily: With one tap, “Do not Disturb” can hide all notifications so you won’t see them on screen.

Wind down: Gets your phone ready for bed by letting you schedule changes to the display. Activating Night Light reduces blue light and greyscale gets rid of all colour, reminding you to switch off for the night.

YouTube Take a break: Schedule custom breathers as often as you want.

Time watched profile: Shows how much time you spend on YouTube, as well as comparisons to previous time periods.

Quiet your notifications: Notifications sent between 10pm-8am will be received without sound or vibrations, and you can customize your own quiet hours.

Choose how you watch: Autoplay control lets you decide whether you want the next video to start playing automatically.

Family Link Digital ground rules for kids: Receive a notification that lets you approve or block the apps your child wants to download.

Keep an eye on their screen time: Set screen time limits, schedule device bedtimes, see how often your children use apps, and remotely lock their devices when it’s time to play, study, or sleep.

Nutritious content: Get recommendations from actual teachers and help your kids enjoy quality content.

Wellbeing Website “Great technology should improve life, not distract from it.”

“We’re creating tools and features that help people better understand their tech usage, focus on what matters most, disconnect when needed, and create healthy habits for the whole family.”

Instagram

News feed: “You’re all caught up” message when you’ve seen every post from the last two days.

July 2018

Your Activity: Dashboard that shows you how much time you’re spending on the app each day and a weekly average. From there, you can set a “Daily Reminder” that notifies you when you’ve been on the app for a certain time period in a day.

Kevin Systrom - CEO “Any time should be positive and intentional. . . . Understanding how time online impacts people is important, and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”

Facebook

News feed algorithms: Facebook changes its News Feed algorithm to prioritize friends and posts at the expense of public

January/ July 2018 content and news outlets.

Your Time on Facebook: Dashboard that shows you how much time you’re spending on the app each day and a weekly average. From there, you can set a “Daily Reminder” that notifies you when you’ve been on the app for a certain time period in a day.

Mark Zuckerberg - CEO “I’m changing the goal I give our product teams from focusing on helping you find relevant content to helping you have more meaningful social interactions….Now, I want to be clear: by making these changes, I expect the time people spend on Facebook and some measures of engagement will go down. But I also expect the time you do spend on Facebook will be more valuable.” – January 2018 “Protecting our community is more important than maximizing our profits….We feel a responsibility to make sure our services aren’t just fun to use, but [are] also good for people’s well being.” (3Q17 conference call) Source: Company websites, Instagram – TechCrunch (2018)

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The need to embrace ethical design While we acknowledge the technology industry has taken the necessary step forward in addressing smartphone addiction, the focus on time spent (e.g. time limits, dashboard analytics, self-policing) is unlikely to be enough in the long-term given it doesn’t consider the context in which content is consumed and created. Therefore the tools that have been introduced so far may make users more mindful of how much time they are spending on their smartphones, but it doesn’t address the underlying issue surrounding the use of persuasive technology.

A variety of experts have responded to the initial step forward that has been made by the likes of Apple and Google with mixed views (NBC News - 3 August 2018): •

“People ignore warnings all the time. Knowing something is dangerous doesn’t stop you from using it” [Apple Screen Time] – “None of that is rocket science.” Dr David Greenfield – Founder of The Center for Internet and Technology Addiction – Assistant Clinical Professor Psychiatry, University of Connecticut

•

“If one is addicted to maximising ‘likes’ it seems that these tools are a bit like suggesting to an alcoholic that he/she set an alarm to go off after the first few drinks or a few drinks – not effective at all.” Dr Patricia Greenfield – UCLA psychology professor

•

“They’re doing the minimum first step of helping people understand just how much time people are spending on something.” Professor Sherry Turkle – MIT

We believe the broader ask would be the need for the technology industry to embrace ethical design within long-term product development, including developing and implementing persuasive technology in a sustainable manner. This is because there are parts of the underlying technology, what we call persuasive design or addictive software that has been purposely designed to exploit vulnerabilities in human psychology which, as we have already discussed, has left some open to both physical and psychological distress (Figure 11). We summarise some of the ways in which ethical design can be embraced below, followed by an academic view in the case study from BJ Fogg – behaviour scientist and the founder of the Stanford Behaviour Design Lab – on page 29.

Developing and implementing persuasive technology with an ethical stance In August 2018, a group of 60 US psychologists, researchers and children’s advocates wrote a letter to the American Psychological Association to condemn the tech industry’s practice of using persuasive psychological techniques, claiming it’s unethical for psychologists to be involved in tactics that risk harming kids’ wellbeing.

In this context, ethical design would involve designing technologies in ways that promote good online behaviour and take social responsibility for the wellbeing of their users. The Center for Humane Technology – led by former Design Ethicist at Google Tristan Harris – emphasises the importance of humane design as the solution. It calls for technology makers to re-imagine their products with a clear-eyed understanding of being human, and compassion for our vulnerabilities and needs. There needs to be a conscious decision about the goal of the product they’re creating combined with the willingness to be measured by more meaningful human metrics.

With every design choice, the Center for Humane Technology says “product should be about what’s best for people, not what’s best for grabbing eyeballs.” It may include converting intermittent variable rewards into less addictive, more predicable ones with better design. For example, they could empower people to set predictable times during the

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Barclays | Sustainable & Thematic Investing day or week for when they want to check “slot machine” apps, and correspondingly adjust when new messages are delivered to align with those times.

To guide development they ask the following:

• Devices: What if we designed devices to help us disconnect without missing something important? What if we designed devices to help us fall asleep on our schedule? What if we designed devices for quick in-and-out uses, not endless interactions?

• News feeds: What if we designed news feeds to reward the most in-depth reporting, not clicks?

• Social media: What if we designed social media to reduce loneliness and made it easier to coordinate with others?

• Home Screens & browsers: What if we designed home screens to promote off-screen choices, not just on-screen choices?

There are various companies that have embraced the concept of humane design, including AdBlock (helps users reclaim 30-40% of their attention across the internet), Hinge (helps users spend 80% less time swiping matches for dates, 5x more conversations) and Moment (helps the average person to reduce daily screen on phones by 30 minutes a day). Even Facebook has endorsed the Time Well Spent movement; however, the overemphasis on time spent so far doesn’t take into consideration of the use of persuasive technology, in our view.

Regulators could consider making digital wellbeing a long-term requirement for technology companies to consider when developing new products. This would force companies to consider the long-term health of its users which could cause certain design features to become less compelling. This could additionally become a reporting requirement within the financial statements; similar to what we see today with social responsibility and governance.

It could also spur other existing consumer-facing industries with exposure to adolescents to respond, such as online gaming and game consoles. A better understanding could also influence the development of nascent industries such as EdTech, which is trying to introduce new educational software.

Enforcing minimum age requirements Though social media platforms have minimum age requirements (see Appendix 2 – Summary of Parental Guidelines), they are unable to verify the date of birth that users provide at registration. In November 2017, Ofcom found underage access was “on the rise” with half of 11- to 12-year-olds having a social media profile. According to a survey conducted by Internet Matters, Children as young as 11 are posting on social media sites an average of 26 times per day and typically attract 100 or more followers on each network, but fewer than half of these ‘friends’ are ‘real life’ friends (Internet Matters – 13 June 2016).

The government could consider introducing a set of child safety measures that all social networks must have in place. This would help to ensure there is consistency amongst the social networks and make companies tighten their policing efforts. Another option could involve asking parents to register phones that are being provided to children in-store by providing documentation to confirm the child’s age. The age of the user could then be embedded into the phone within the set up process (and in line with existing regulation on children’s online privacy protection) and determine what services are made available on the phone. For example, the phone would not allow social media apps to be downloaded by a user who is below the minimum age.

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Limiting usage: curfews/daily limits If children are using their smartphones and social media either excessively or at times when they should be doing something else (e.g. schoolwork or sleeping), regulators could introduce daily limits and curfews. Various countries in Asia (see Appendix 4 – Lessons from the East) have introduced curfews, though with mixed results given children are finding ways to get round imposed restrictions, e.g. black market logins). It would require the government in collaboration with the technology industry to provide guidance as to what constitutes as healthy usage which isn’t as clear cut as it might be for other addictions such as alcohol and cigarettes. That is, not all usage is equal given smartphones in most instances will remain life-enhancing; however, some form of action or moderation is required to ensure access to a smartphone is not displacing more meaningful activities such as school and work.

We acknowledge Apple and Google have introduced dashboards to help monitor how much time you spend on your phone, as well as feature modes such as “Bedtime” and “Do Not Disturb” to reduce the level of distraction. However, this relies on the individual user to selfregulate, and in the case of children, their parents have to monitor on their behalf. More recently, the French government announced children won’t be allowed to bring their phones into classrooms starting September 2018. It will apply to all pupils from the time they start school at the age of six – up to 15 when they start secondary school (Guardian – 11 December 2017). The French education minister said that this was a “public health message to families” and that “it’s good that children are not too often, or even at all, in front of a screen before the age of seven.”

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Case Study: BJ Fogg – The ethics of persuasive technology BJ Fogg is a behaviour scientist and the founder of the Stanford Behaviour Design Lab. He is considered by many as the godfather of captology (the study of computers as persuasive technology), with his framework considered the blueprint of many social media apps.

We spoke with BJ Fogg, who directed us to his work on the ethics of persuasive technology in Persuasive Technology: Using Computers to change what we think and do, which we summarise below: •

Intentions, methods and outcomes – three areas worthy of inquiry: By examining the intentions of the people or the organisation that created the persuasive technology, the methods used to persuade, and the outcomes of using the technology, it is possible to assess the ethical implications.

Intentions – why was the product created: Identifying intent is a key step in making evaluations about ethics. If the designer’s intention is unethical, the interactive product is likely to be unethical as well. One reasonable approach is to examine what its designers hoped to accomplish.

Methods of persuasion: Examining the methods an interactive technology uses to persuade is another means of establishing intent and assessing ethics. Some methods are clearly unethical, with the most questionable strategies falling outside a strict definition of persuasion. BJ Fogg considers using emotions to persuade and takes the view that it is unethical or ethically questionable only when its intent is to exploit users or when it preys on people’s naturally strong reactions to negative emotions or threatening information expressed by others.

Outcomes – intended and unintended: Although captology focuses on intended outcomes, creators of persuasive technology must take responsibility for unintended unethical outcomes that can reasonably be foreseen. To act ethically, the creators should carefully anticipate how their product might be used for an unplanned persuasive end, how it might be overused, or how it might be adopted by unintended users. Even if the unintended outcomes are not readily predictable, once the creators become aware of harmful outcomes, they should take action to mitigate them.

•

When persuasive technology targets vulnerable groups: Children are perhaps the most visible vulnerable group, but there are others, including the mentally disabled, the elderly, the bereaved, and people who are exceptionally lonely.

•

Stakeholder analysis – a methodology for analysing ethics: To assess the ethics of technology, identify each stakeholder and determine what each stands to gain or lose.

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Is regulation the only way?

There are several industries that have had to adapt significantly to society becoming more aware of usage and health and wellness, with tobacco being the obvious one historically.

Sugar is currently having its ‘tobacco moment’ following pressure from expert campaigns and additional regulation forcing companies to lower sugar levels, reduce product/portion size or push healthier products. We have seen both society and companies adapt over a relatively short period of time to a call for the UK food industry to reduce sugar in their most popular products by 20% by 2020.

However, sometimes the changes benefit consumers and make a product safer or better, and other times, it is more of a stopgap measure to maintain profits and avoid external consequences like regulation, but doesn’t actually improve the underlying problem.

According to Professor Ken Warner from the University of Michigan, light cigarettes, seatbelts and diet food are part of a legacy of pre-emptive self-regulating – refer to separate case studies on pages 31 and 32.

Though awareness of smartphone addiction or the idea of becoming more mindful of how much time we spend on our devices has risen, it is less tangible than sugar and tobacco, which, to a certain extent, has made it harder to address. A recent article interestingly referred to the “Time Well Spent” features as the “Marlboro Lights” of the technology industry (Mashable – 04 August 2018), given the Big Tech-endorsed manifestations such as Screen Time and Digital Wellbeing are solutions offered by the people that created the problems in the first place. The article highlights how such initiatives look similar to the efforts to combat addiction by other industries such as Tobacco (light cigarettes) and Food (“fat free”).

Similarly, while such features such as revealing screen time usage, bedtime mode and app limits re-frame the issue in a way that might benefit tech companies from a PR perspective; they may not necessarily help tech users as much as the industry might hope.

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Case Study: Are smartphones the new cigarettes?

In 1994 the top executives of the seven largest American tobacco companies testified in Congress that they did not believe that cigarettes were addictive and harmful, when in fact they knew the opposite was true and they would rather their own children did not smoke (New York Times – 15 April 1994). The public perception of the tobacco industry has undergone a uturn over recent decades, with consumers and governments demanding more from these companies. A better understanding of the health risks has helped; however, governments have resorted to higher tax and stricter regulation to make the industry change the way it operates over the years – Figure 20.

Similar to the tobacco industry, the tech industry has come under significant pressure of late given its role in data privacy, market power, the control of information and concerns surrounding national security. At Davos this year, Marc Benioff (CEO – Salesforce) told CNBC that just as the cigarette industry has been regulated, so too should social media companies: “I think that, for sure, technology has addictive qualities that we have to address, and that product designers are working to make those products more addictive, and we need to rein that back as much as possible.”

Putting the obvious differences aside, we believe there are comparisons to be made between cigarettes and smartphones given they are both forms of addiction within an industry of concentrated power. Yet the tech industry is not required to operate to at the same level of regulatory standards as other industries causing potential to damage consumers’ health (tobacco, alcohol, gambling). We now have the benefit of hindsight with cigarettes, which, in our view, should help to provide some form of context when we consider how to deliver responsible change when it comes to remedying smartphone addiction.

FIGURE 20 Regulations overview of the tobacco industry 1868

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UK Parliament First strong Chesterfield runs First Royal College of 43% increase in passes Railway Bill connection ad claiming “Just cigarette tax leads to Physicians (RCP) report mandating smoke between lung as pure as the 14% fall in British men’s "Smoking and Health" free carriages cancer and smoking water you drink" cigarette consumption was published

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UK banned cigarette ads on TV

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Smoking is Debate about UK Children's In the US, Philip First biological US Surgeon General All cigarette Philip Morris ad “Tests packets in the banned on all of health effects of Act bans sale of Morris' Marlboro showed three out of every link between produced first London tobacco begins in tobacco to targeted at smoking and report on “Smoking UK carry health four cases of smokers’ Underground warning The Lancet children under women cancer and Health” cough cleared on network 16 changing to Philip Morris“

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Virgin Atlantic Health warnings US study finds passive EU increases size of Legal age to buy UK bans point UK limits bringing 800 UK survey shows launches first on cigarette smoking is a cause of health warnings to tobacco in the UK of sale cigarettes and 1kg of more ex-smokers smoke-free packets are heart disease in non- cover 35% of front raised to 18. England displays of rolling tobacco from using e-cigarettes transatlantic flights required in UK smokers goes smoke-free tobacco than smokers and 45% of back mainland Europe

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All TV advertising of tobacco is banned across the EC

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2004

2008

2010

Manufacturers Study finds children’s Singapore Airlines Leaked documents show Ireland is first country to ban have to include second hand smoke offer daily nontobacco companies smoking in picture warnings exposure in England has smoking flights to knew of smoking’s workplaces and on packs in UK fallen 60% between London harmful effects but public places 1996 and 2006 concealed knowledge

2012

Australia is first country to require plain packaging

Source: ASH, CDC

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Case Study: Sugar tax The Soft Drinks Industry Levy came into force in the UK on 6 April 2018 and taxes manufacturers 18p per litre produced if the drink contains 5 grams of sugar per 100ml, and 24p per litre for more than 8 grams of sugar. Similar taxes have reportedly worked in five other countries, with some methods reducing consumption of fizzy drinks by up to one quarter (a sugar tax in Mexico cut fizzy drink sales by 12 percent in its first year). HMRC data, analysed by accountancy group UHY Hacker Young, reveals that 326 soft drinks manufacturers have been hit by the UK’s so-called ‘sugar tax’. As drink manufacturers appear largely unwilling to shoulder the cost of the levy they are either passing on the cost to consumers or are reformulating. The British Soft Drink Association (BSDA) claims that producers have lowered the sugar content of soft drinks by 19% since 2013, that 11- to 18-year-olds have reduced their consumption of sugar-sweetened beverages by 23% between 2010 and 2014 and that overall sugar intake in teenagers dropped by over 8% over the two years to 2014.

No recipe change for Pepsi and Coca-Cola original, others reformulate...

Coca-Cola is unsurprisingly not changing its recipe for its original variety (a lesson from the unsuccessful launch of its ‘New Coke’ in 1985) but is instead mitigating the cost by reducing the size of its bottles as well as increasing prices. IRI data shows a significant shift of shoppers switching to Diet Coke away from the original version since February 2018. Pepsi hasn’t changed its recipe either but both Pepsi and Coca-Cola have been reducing the sugar in their other brands for years by incorporating sweeteners such as aspartame and acesulfame k in order to keep the taste similar. The Telegraph (31 March 2018) reports that Coca-Cola’s Fanta, Sprite and Doctor Pepper have not been hit by the levy, while Pepsico’s 7 Up will fall into the lower band after a 30% cut in sugar and Britvic’s Robinson’s squash is now only available with no added sugar. Global Brands, which is best known for making its VK alcopops but also makes Franklin & Sons upmarket cola, lemonade and mixers, has reduced the sugar in some of its drinks without adding sweeteners, but left five of its 15 flavours unchanged. Other companies, including Irn-Bru maker AG Barr and Suntory, the Japanese owner of Lucozade and Ribena, have used sweeteners to lower sugar levels so that virtually all of their drinks don’t fall under the scope of the levy.

FIGURE 21 Let’s not sugar-coat the issue…

Source: Public Health England. *based on 4g sugar cube

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INVESTOR GUIDEBOOK In conjunction with our sector analysts, we aim to assess the implications our discussion on smartphone addiction could have on individual companies and their respective industry outlooks. We focus our analysis on the smartphone manufacturers (Apple, Google) and social media platforms (Instagram, Snap, Facebook, Twitter). We believe there are useful takeaways to be had by looking at parallel industries such as online gaming (Tencent, Take-Two Interactive, Electronic Arts, Activision Blizzard, Ubisoft and Zynga) and online gambling (William Hill, Paddy Power and Betfair). We also consider the role of the telecom operators (Vodafone, TalkTalk, BT/EE and O2).

In this chapter we argue that a better understanding of smartphone addiction amongst adolescents could help steer the development of mobile technology as it becomes further engrained into our lives as artificial intelligence and immersive technology (AR/VR) are adopted by the ecosystem. We view EdTech as a potential opportunity within this, with the key separator, in our view, being how to build functionality that is both sustainable and beneficial to society. We acknowledge there is a trade-off between revenue and responsibility; however, acting proactively would be the lesser of two evils when considering the risk of societal backlash or tougher regulation in the long-run.

The growing prominence of ESG analysis (Environmental, Social and Governance) in investment decision making is beginning to place additional pressure on technology companies to take a wider view of social responsibility, especially against a backdrop of premium valuations and concerns surrounding privacy, the use of data, taxation and anti-competitive behaviour. We focus our discussion on the Social and Governance issues and propose what we consider is an appropriate ESG framework to evaluate companies trying to mitigate the risks associated with smartphone addiction.

To help investors, we have also put together questions for management with topics and questions we believe are pertinent to companies within our coverage universe.

FIGURE 22 Smartphone Addiction – sector implications Mobile Operating

Social

Online

Online

Telecom

System

Media

Gaming

Gambling

Operators

Google

Facebook Snap Twitter

Activision Blizzard Electronic Arts Take-Two Interactive Tencent Ubisoft Zynga

Betfair Paddy Power William Hill

BT/EE TalkTalk TEF UK (O2) Vodafone

Source: Barclays Research. Note: TEF UK is a wholly owned subsidiary of Telefonica SA.

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View this as a positive change to the industry...

The introduction of various time-keeping tools by Apple, Google, Instagram and Facebook have made people more mindful of their usage; however, per our earlier discussion we believe the broader need would be to embrace ethical design within long-term product development. This may have a negative impact on company financials and user engagement in the short term, but we would argue in the long term a better understanding of the subject topic could be a positive result for the industry. It would likely help influence the development of new consumer-facing technology such as EdTech, but also the means by which smartphones are engrained into our life going forwards as we move towards further personalisation and immersion thanks to artificial intelligence and augmented reality/virtual reality.

EdTech – encouraging usage to remain beneficial As we argued in Gen Z: Step aside Millennials (29 June 2018), Generation Z are entrepreneurial, enjoy accumulating knowledge and are at the forefront of technology - we highlighted EdTech as a potential new business model, citing examples such as YouTube lectures. We argue that EdTech could also be an avenue through which society could transform the problems associated with smartphone addiction into beneficial, productive outcomes. It is difficult to argue that children should simply cut down their usage (as we have already argued, quantity and quality of usage are separate issues) and therefore ensuring that the usage is developing and utilising skills could improve the experience.

In our interview with expert Dr Graham (refer to page 19), he indicates that “we need to give children opportunities where they can use their skills in a positive way, so that they continue to learn and flourish. Having a sense of purpose is an important part of wellbeing.

Restriction alone takes that sense away from you.”

Minecraft views game-based education tools as an opportunity...

As an example in 2016, Microsoft launched Minecraft Education Edition to build on its investment in Minecraft, which it acquired in 2014. Minecraft was already known as a tool to help children learn about game design and programming but Microsoft acquired MinecraftEdu specifically for learning. MinecraftEdu allows teachers to use Minecraft in the classroom and also includes lessons and activities for subjects such as STEM, history, language and art. TeacherGaming, a new start-up from the team behind MinecraftEdu, is building an online service to enable teachers to use ‘blockbuster’ games in schools. The service will include access to a variety of learning materials and the TeacherGaming Desk service offers analytics for teachers to track their students’ progress.

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Sustainability vs. profit: From trade-off to the new norm...

The technology industry today is built on gaining and maximising attention, with investors placing premium valuation on companies that are increasing their user base and user engagement. Key performance metrics like Daily Active Users (DAUs) and Average Revenue Per User (ARPU) are well cited across investor presentations; however, to a certain extent the ‘cost’ of such interaction is widely ignored. This goes beyond assessing cost from a financial perspective, but also the impact this is having on societal wellbeing (refer to Impact on Society - Figure 11). This is why we argue there is a need to embrace ethical design within long-term product development, even if there is a ‘trade-off’ between revenue and responsibility. We outline below why we believe this so-called ‘trade-off’ is going to become the new norm within the technology industry.

The risk of societal backlash and material regulatory action The technology industry is already experiencing mounting pressure over taxes, privacy and anti-competitive behaviour, with the risk of an anti-tech backlash and material regulatory action growing in fear of their market influence. Dr Richard Graham (see page 19) commented children are more aware and sophisticated when it comes to their footprint, and “if the Luddites were ever to emerge again they would be young this time not old.” The risk for investors is not that regulation will make the underlying business models unworkable; however, it could be a structural drag on revenue if user engagement/advertising is impacted or anti-monopoly enforcement makes them behave more like public utilities. Thus they would be subject to more regulation aimed at preserving competition, innovation and open access.

Consumer perception and dumb phones becoming fashionable There is a role perception plays in what people value, similar to what we have seen with organic products in other sectors; for example, what if we had different shelves that highlighted ethically designed technology products or search engines that promote these website ahead of the others. In recent years we have seen a variety of ‘anti-smartphones’ or distraction-free smartphones emerge, with some even becoming a fashion-icon (e.g. the revived Nokia 3310 – “A modern classic re-imagined”).

GDPR has raised consumer awareness of data misuse One of the key findings from our deep dive on the rise of eRegulation – Sustainable & Thematic Investing: The rise of e-Regulation (31 May 2018) – is the risk we foresee in targeted online digital advertising and how it will need to adapt to upcoming ePrivacy laws which widen the scope of personal data to include the use of online cookies. This will give consumers even more control when it comes to their personal data, placing additional pressure on companies with regard to their data responsibilities given the reputational and financial risks attached to potential breaches in the future.

ESG analysis – maximising advertising revenue at what cost?

The growing prominence of ESG (Environmental, Social and Governance) analysis and social responsibility within mainstream investing means there is a need for the industry to consider the sustainability of business models and the long-term value of assets within company valuation. This requires taking into account issues that have real and quantifiable financial impacts over the long-term to promote sustainable business practices and products. We believe our discussion on smartphone addiction falls into both Social and Governance, though we acknowledge there is a separate debate to be had on Environmental given the concerns surrounding power and unsustainable materials associated with the much broader smartphone industry.

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ESG framework: Smartphone addiction Combining our view on the need to embrace ethical design within long-term product development, we outline what we consider an appropriate ESG framework for our discussion on smartphone addiction, which considers both over usage and the use of persuasive technology in Figure 23. We believe this framework provides a starting point when evaluating how companies are trying to mitigate the risks associated with smartphone addiction. We focus our discussion on Social and Governance factors, using the Thomson Reuters ESG sub-headings to guide our framework:

Social • Product Responsibility: This includes the capacity to produce quality goods and services taking into consideration the customer’s health and safety, integrity and data privacy. Additional measures such as monitoring consumer complaints or dissatisfaction, customer privacy and integrity, customer health and safety and the company’s marketing practices (e.g. marketing to vulnerable consumers) could also be considered.

• Community: This includes measuring the company’s commitment towards protecting public health and respecting business ethics. Additional measures such as anticompetitive behaviour and business ethics could also be considered.

Governance • Management: This includes measuring a company’s commitment and effectiveness towards following best practice corporate governance principles. Additionally, board compensation could be considered.

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Barclays | Sustainable & Thematic Investing FIGURE 23 Barclays - ESG Framework - Smartphone Addiction Thomson Reuters

Barclays – Smartphone Addiction

Social Product Responsibility

Ethical Design 1) Implement a framework to encourage the design of ethically responsible persuasive technologies: - Expand the responsibility of product designers to include design ethics e.g. can these persuasions be morally justified? What does each stakeholder stand to gain/lose?

- Ensure product development reflects the ethical framework, including responsibility to intended users, unintended users and society at large - Conduct internal audits to assess the applicability and effectiveness of the ethical framework - Appropriately outline how psychologists and their behaviour change tools will be used within product design 2) Ensure vulnerable users (children, seniors ) are appropriately safeguarded: e.g. identity theft, cyber bullying, hoax content, child abuse, grooming, hate speech - Consider providing Safe Accounts for under-18s with extra protections built in (NSPCC recommendation) which include high privacy settings as default (e.g. location settings locked off, accounts not public or searchable using email), control over connections (e.g. video chat and live streaming restricted to the young person’s contacts) and appropriate reporting buttons - Explore and evaluate the impact night-time use is having on users and whether curfews are necessary 3) Design and implement robust controls on fake news detection and underage usage: - Evaluate and remove misleading content using AI (e.g. clickbait, propaganda, misleading headings, parody, slanted news)

Community

Advertising Integrity 1) Digital Wellbeing campaigns: - Working with governments and international health organizations to further awareness and understanding of technology addiction (e.g. school curriculum, awareness campaigns, digital literacy) - Promoting online safety, mindful usage and the use of parental controls 2) Advertising policies: - Ensuring children are not exposed to advertising aimed at adults on smartphones and in-app advertising (e.g. pornography, gambling, adult gaming) Duty of Care 1) Additional research funding & expert committees: - Ongoing effort to ensure smartphones remain beneficial to society via additional research and expert collaboration 2) Reinvesting in society: - Supporting local support groups and tech addiction clinics

Governance Management

Transparent Reporting 1) Transparent disclosure on action taken against false and underage accounts: - Number of underage accounts - Number of accounts closed and supporting rationale (e.g. spambots, likebots, stalkers, pseudonym accounts, trolls) 2) Transparent disclosure on the use of psychological persuasion technology, especially those in digital products used by children (see Open letter by US psychologists to the American Psychological Association- August 2018) 3) Additional nonfinancial and user engagement metrics: - Measuring the quality of a session: is it successful or not?

- Measuring ‘positive’ actions by a user e.g. percentage of users who have engaged with images at least 1x, 2x, 5x in the past week, month or year, or percentage of users responsible for uploading 80% of all images - Measuring the depth of relationships on the platform e.g. number of new groups, average percentage of connections that any single user interacts with - Additional segmentation e.g. demographic usage trends – age, region

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Investor Question Bank We have put together a list of questions to help investment managers engage with companies to help assess whether they are taking the necessary steps to address this subject area:

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1.

Technology addiction: Do you deem technology addiction a concern for your underlying business model? What processes are in place to ensure users continue using your technology in a sustainable manner?

2.

Usage metrics: What metrics are used to assess how users are consuming your technology? How has usage of your technology evolved over time – specifically on time/duration and frequency? Have external factors such as the Facebook Cambridge Analytica scandal impacted usage, churn or user sentiment?

3.

Minimum age requirements: Has your offering implemented a minimum age requirement? How often will this be reviewed and to what extent are such requirements policed? What happens when underage users are found? What percentage of users would you say are underage? To what extent could mandatory age verification be implemented?

4.

Fake accounts: What controls are in place to ensure fake accounts are removed? How many accounts on your platform are fake?

5.

Product development: Are there any plans to alter the framework for product development within your company to reflect the idea of technology addiction and digital wellbeing? Experts call for the concept of ethical design and digital wellbeing to be integrated into products – what is your view on this?

6.

Tech backlash: What would it take for the risk of tech backlash (in respect to addiction/overuse) to be included within your financial report as a long-term risk to the company? Is there pressure for additional disclosures in the financial reports?

7.

Children: Do you believe your technological offering provides a safe environment for children/young users? What are your biggest concerns when thinking about their safety?

8.

Parental control: Do you feel your parental controls are robust enough given so many of the features can be switched off? Do parents actually use this feature and has any internal work been done to evaluate its effectiveness?

9.

Less persuasive design: To what extent do you think Apple’s Screen Time and Google’s Digital Wellbeing initiatives will help address technology addiction? Is the broader ask the need for the software providers (e.g. mobile apps) to build less addictive technology and thus embrace less persuasive design? What are your thoughts on time curfews, mandatory parental controls and age verification?

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Sector implications Contributing Authors U.S. Internet Ross Sandler +1 415 263 4470 ross.sandler@barclays.com BCI, US Gregory Zhao +1 212 526 2268 gregory.x.zhao@barclays.com BCI, US Ryan Gee +1 415 274 5335 ryan.gee@barclays.com BCI, US European Telecom Services Maurice Patrick +44 (0)20 3134 3622 maurice.patrick@barclays.com Barclays, UK European Leisure Patrick Coffey +44 (0)20 3555 5955 patrick.coffey@barclays.com Barclays, UK European Media Nick Dempsey +44 (0)20 3134 5888 nick.dempsey@barclays.com Barclays, UK

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Social Media U.S. Internet Ross Sandler +1 415 263 4470 ross.sandler@barclays.com BCI, US

Barclays company commentary Facebook As mentioned throughout this report, Facebook has been at the centre of the conversation around smartphone addiction and the role that social media applications play. Years of growth hacking and adding addictive features have now come back to haunt Facebook as this topic has hit mainstream. We summarise a recent blog post by Facebook which considers whether spending time on social media is bad for us on page 41. The company has finally started to address the issue with its “Time Well Spent” effort, whereby features and controls are being introduced across the entire family of apps to improve the experience and make users feel better about their engagement. This has weighed on engagement growth (evidenced by time spent declines Y/Y, mostly a result of removing passive video) and could further be impacted in 2018 and 2019 as more of the metering products (i.e. – “you are all caught up” etc) are introduced across the user base.

Facebook is dealing with this issue at the same time as many other issues around the company’s role in society are being questioned. In summary, we are encouraged by the initial steps being taken to address smartphone addiction but think this is only the first innings.

Google Android has over 80% smartphone operating system (OS) market share, hence as the provider of open source software, plays an important role in the debate around smartphone addiction. Google applications (e.g. calendar, maps) are mostly utilities, not time-wasting addiction-oriented apps, but Android and phone original equipment manufacturers are benefitting from the growth in this industry and share some of the responsibility to limit addiction. The company just started to address the topic at its recent developer conference (i/o) where it introduced user controls at the OS layer to limit the use of any of the applications on the phone. Along these lines, YouTube recently introduced these controls; the user will be allowed to set limits and monitor their time spent watching videos each day.

We think these are good preliminary steps, but cutting off auto-play looped videos and notifications would be further steps in this direction. Passive video time-wasting has been associated with negative user feelings, so YouTube has a responsibility in this area, in our view.

In summary, we think additional scrutiny around smartphone addiction could weigh on Android as the largest OS company globally, but unlike Facebook, Google’s core apps are mostly utilities that help with everyday tasks vs. creating any negative impacts to society around addiction.

Twitter and Snapchat These two platforms are too small to be in the cross-hairs of the broader smartphone addiction trend. Twitter has less than 150m DAUs and SNAP is hovering around 188m currently, not nearly broad enough, in our view, to contribute meaningfully to the problem globally (certainly not on the scale of Apple, Google or Facebook). However, there are features in SNAP like “streaks” and Twitter’s heavy use of notifications that encourage addictive behaviour and may have to be dialled back.

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Case Study: Facebook – Is spending time on Social Media bad for us?

In a blog post in December 2017, Facebook suggested social media can harm mental health when used in certain ways. Put differently, it depends on how you use social media. Though we disagree with this view and believe there is more to be done, we summarise the post’s key takeaways below: •

Is Social Media good or bad for wellbeing? It depends on how you use the technology...

The bad: In general, when people spend a lot of time passively consuming information – reading but not interacting with people – they report feeling worse afterward. In one experiment, University of Michigan students randomly assigned to read Facebook for 10 minutes were in a worse mood at the end of the day than students assigned to post or talk to friends on Facebook. A study from UC San Diego and Yale found that people who clicked on about four times as many links as the average person, or who liked twice as many posts, reported worse mental health than average in a survey. Though the causes aren’t clear, researchers hypothesize that reading about others online might lead to negative social comparisons – and perhaps even more so than offline, since people’s posts are often more curated and flattering.

The good: On the other hand, actively interacting with people – especially sharing messages, posts and comments with close friends and reminiscing about past interactions – is linked to improvements in wellbeing. A study conducted with Carnegie Mellon University found that people who sent or received more messages, comments and Timeline posts reported improvements in social support, depression and loneliness. The positive effects were even stronger when people talked with their close friends online. Simply broadcasting status updates wasn’t enough; people had to interact one-on-one with others in their network.

•

Facebook wants to focus more on social interactions and less on time spent...

The blog post highlighted four features: News Feed quality: Facebook amended its algorithms to provide more meaningful interaction and reduce passive consumption of low-quality content – “even if it decreases engagement metrics in the short term”.

Snooze: This feature gives users the option to hide a person, page or group for 30 days, without having to permanently unfollow or unfriend them.

Take a break: This feature gives users more centralised control over when they see their ex-partner on Facebook and what their ex-partner can see.

Suicide prevention tools: Facebook has suicide prevention support on Facebook Live and introduced AI to detect suicidal posts before they are reported.

•

Pledged $1m towards research to better understand the relationship between technologies, youth development and wellbeing... Facebook acknowledged they don’t have all the answers, but they do want to help elevate the conversation with additional research.

Source: Facebook – Blog post 2017

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Online Gaming Asia feeling the heat, gaming disorder classified by the WHO In June 2018, the World Health Organisation (WHO) classified “Gaming Disorder” as a new mental health condition in a new draft of the WHO’s International Classification of Diseases (11th edition). When the ICD-11 is adopted at the World Health Assembly in May 2019, gaming disorder will join one other behavioural disorder in the classification, gambling disorder. The classification means governments around the world are expected to provide treatment and incorporate it into their healthcare systems, including the NHS in the UK, which has already launched its first treatment centre. Dr Vladimir Poznyak of the WHO’s Mental Health and Substance Abuse department suggests between 1% and 6% of adolescents and young people may be afflicted by gaming addiction although they were not yet diagnosed sufferers. There are several studies that suggest there are links between depression and video gaming; however, it has also been shown to improve surgical skills (Reuters - 19 February 2007) and provide relaxation. Therefore, like smartphone addiction, it can be hard to associate addiction to a specific activity.

Gaming addiction has become a particular concern in Asia due to the rapid spread of mobile and social gaming and is even considered a public health problem with cases involving violence and fatalities. Headlines included a gamer poisoning his parents for placing a curfew on his gaming, or a married couple leaving their three-month old daughter to die of dehydration while they played online games in South Korea (Guardian - 5 March 2010). In response, countries in Asia have adopted a variety of treatments and approaches, including curfews, electroshock therapy and outdoor boot camps with mixed results – refer to Appendix 4 – Lessons from the East – for further information on China, South Korea, Japan and Taiwan.

More recently, Chinese regulators have vowed to restrict approval of new games amid concerns over children’s health, alongside the Chinese president Xi Jinping’s call to address short-sighted vision among minors. The state news agency Xinhua commented “For the nation’s future, we can never allow gaming companies to get rich by inducing teens to get addicted [to games]” (South China Morning Post – 5 September 2018).

World Health Organisation: Gaming Disorder Characterised by impaired control over gaming, increasing priority given to gaming over other activities to the extent that gaming takes precedence over other interests and daily activities, and continuation or escalation of gaming despite the occurrence of negative consequences.

For gaming disorder to be diagnosed: i)

The behaviour pattern must be of sufficient severity to result in significant impairment in personal, family, social, education, occupational or other important areas of functioning

ii)

Would normally have been evident for at least 12 months.

We summarise below what we believe are the key industry concerns, before highlighting specific company commentary and our case study on Tencent.

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Key industry concerns...

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•

Unused parental controls: One sign of unhealthy gaming is when a child is left to setup a console or gaming computer on their own, according to Andy Robertson, author of forthcoming book Taming gaming: Guide your child to video game health.

Though gaming companies have already introduced parental controls, most parents do not use them or are unaware such controls exist (Pocket-lint – 4 July 2018).

•

Ignored age controls: According to a survey from childcare.co.uk, more than half of parents in the UK let their children play games recommended for adults only. The UK uses the Pan European Game Information (PEGI) rating system, which classifies games for use by those over age 3, 7, 12, 16, and 18. There is no process of age verification in many online games, with the survey noting that parents allow their children to play these PEGI 18 titles “without supervision or knowledge of the game beforehand.”

•

Gambling – Skins betting: In gaming, some believe that skins betting and loot box features are a form of gambling. Skins are items which can be won or bought within a game to change the appearance of a character, avatar or weapon. On some websites (separate to the game), players can trade, bet on and sell their skins to try and get better ones. It is only legal when the sites offering skins betting facilities have a proper license and they shouldn't be targeting children; however, the Gambling Commission's study found that just over one in ten 11- to 16-year-olds say they have participated in skins gambling before.

•

Gambling – Loot Box: This feature allows players to pay – often with real money – for a chance to win a virtual item. Some people believe that using these features should count as gambling because the player is risking something of value (either real money or in-game coins) in the hope of winning something else. Even if you are not spending real money, they argue that this encourages risk-taking and gambling-style behaviour, which could potentially be harmful to young people later in life. Loot boxes are not currently legally considered to be gambling in the UK.

•

Lack of playing breaks: A recent survey by OnePoll (July 2018) found the average British child spends just seven hours a week outside, but more than twice that amount playing video games. 40% of parents said they have to force their children to leave the house in order to spend more time outdoors. The NHS recommends children aged five to 18 should get at least one hour of physical activity every day; however, an NHS health survey in December 2016 revealed only 22% of children in England achieve this target. The use of mandatory breaks and prompts within games that give advice on where users can get support for problems could be introduced to raise awareness of gaming disorder.

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Barclays company commentary U.S. Internet Ross Sandler +1 415 263 4470 ross.sandler@barclays.com BCI, US Gregory Zhao +1 212 526 2268 gregory.x.zhao@barclays.com BCI, US Ryan Gee +1 415 274 5335 ryan.gee@barclays.com BCI, US European Media Nick Dempsey +44 (0)20 3134 5888 nick.dempsey@barclays.com Barclays, UK

Tencent Tencent Holdings Limited owns and operates 24 mobile apps in China’s top 100 apps as of June 2018, representing c.48% of China’s mobile internet users’ total time spent, which makes the company a focal name in the debate of mobile internet addiction in China.

Specifically, Tencent’s two instant messenger apps, Weixin and QQ, represented 23% and 7% of user time spent, respectively, but much of the daily engagement is in utility-type functions like messaging friends and family, buying products, paying for services, etc.

However, given the dominance in online gaming in China, Tencent sits in the middle of growing criticism around gaming addiction.

In terms of revenue, globally Tencent is the largest gaming developer and distributor. On the PC side, Tencent owns the top-three most popular PC gaming titles in China, i.e. League of Legend (LoL), Cross Fire (CF) and Dungeon & Fighter (DnF). On the mobile side, it typically holds the top 4-5 spots in China’s top-10 mobile gaming titles. Its top two mobile games (by time spent), Honor of Kings (HoK) and PUBG, had accumulated more than 250mn and 150mn monthly active users (MAU) respectively as of June 2018, with each gamer on average spending 1.8 hours and 1.5 hours per day, respectively, in each game. Making it easier to understand, HoK and PUBG ranked as the #4 and #19 mobile apps in China based on time spent, representing 3.4% and 1.0% of total internet users time spent in June 2018.

While such games increasingly become the primary form of entertainment for young consumers, the awareness and scrutiny around addiction has increased. Our case study on page 46 illustrates that the government is aware of the addiction issue and acting on it.

Tencent has recently adopted multiple methods to restrict young gamers’ time spent in games, such as a two-hour daily limit rule.

In summary, Tencent’s strength in gaming product development and its leading position in the space is a significant long-term driver of increasing shareholder value; however, we see potential risks around stricter regulations from the government near term.

Electronic Arts / Take-Two Interactive For Electronic Arts and Take-Two Interactive, mobile is still a nascent yet growing part of their overall businesses, comprising only 13%/15% of total revenue last year, respectively.

Electronic Art’s top mobile game Star Wars: Galaxy of Heroes has the highest engagement amongst its mobile titles, at an average of 90 minutes a day. One ethical issue that could arise for these two publishers has less to do with mobile addiction and more with console addiction, whereby its two most popular franchises, Battlefield and Grand Theft Auto, are rated M for Mature (for users 17+), but likely 15%+ of its users are under the required age.

Enforcing age requirements to buy/play the game is hard to implement so we do not believe there will be any near-term implications, but it is something to keep in mind.

Activision Blizzard Out of the traditional Western video game publishers, Activision Blizzard has the largest exposure to mobile with 29% of its revenues in 2017 coming from the platform. The company reported average time spent on Candy Crush was 36 minutes per day in 2Q18, well below the self-imposed two-hour limit on Tencent’s Honour of Kings for users aged 1218. It is important to note that only 2% of mobile gamers are payers that make in-app purchases (the remaining 98% play for free), and these payers tend to spend much more time playing than the average user. Therefore, while there is less risk to overall mobile gaming engagement from potential mobile addiction regulation, monetization may be more negatively impacted as any time restrictions would likely pertain more to a paying user base.

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Barclays | Sustainable & Thematic Investing Outside of mobile, gaming addiction is prevalent in Blizzard’s PC World of Warcraft title, where users are immersed in the virtual world and typically play for many hours at a time.

However, conversely to Candy Crush, World of Warcraft is a pay-to-play model based on a monthly subscription fee so monetization would be less impacted if a time restriction was potentially enforced.

Zynga While Zynga is 90% mobile, its mobile titles are mostly in the casual genre, which typically translates to less time spent per user per day. According to comScore, the average Zynga users in the US only spent 14 minutes a day playing its games. There have been no mentions of mobile gaming addiction affecting Zynga’s business or concerning management, but similar to the overall mobile industry, monetization may be impacted if time restrictions were enforced as it mainly limits the time spent of its “whales”, also known as the 2% of mobile users that pay within the games. The company generates over 50% of its bookings from Slots and Poker franchises, so any restrictions on mobile casino or mobile gambling related apps could have a disproportionate impact on Zynga relative to its peers.

Ubisoft Mobile represents a relatively small part of Ubisoft’s revenue (7% in FY19E); therefore, the company is not as exposed to fallout from possible regulation to curtail smartphone addiction. Similarly, China represents a relatively modest part of revenues for the time being (5% in FY19E). Ubisoft has also been treating the issue of loot boxes (where gamers get the opportunity to purchase a randomized selection of in game perks/items in hope of getting rare/high-valued prizes) more carefully than some competitors. They have either avoided them completely or only offer items that have no impact on game progression.

Given this cautious approach, Ubisoft is not as financially reliant on loot boxes as some of its peers. This comes with two important benefits: 1) in the event of regulation, the impact may be less pronounced for Ubisoft, and 2) it is a point of differentiation in the eyes of the gamer community. While digital represents an increasing portion of Ubisoft’s top line (and will continue to grow), we believe management, for the time being, has struck the right balance between profitability and providing players with high quality/value experience.

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Case Study: Tencent and Gaming addiction On 4 July 2017 Tencent shares dropped 4% ($17.5bn in market value/ vs. -2% Hong Kong Stock Exchange) after People’s Daily (4 July 2017) described its Honour of Kings game as ‘poison’ and ‘a drug’ that’s harmful to teenagers. The article referenced several notable examples, including a 13-year old jumping off a building after being scolded for playing and a 17-year old who nearly died of cerebral infarction after playing non-stop for 40 hours. At the time, the world’s most popular game had more than 200m players with 80m daily active users. More than half of its users were below 24-years-old, including more than a quarter below 19 (Jiguang - 2017).

We summarise some of the action taken by Tencent in recent years: 2017: Age-based playing restrictions In 2017 Tencent introduced age-based restrictions for its most popular game Honor of Kings amid concerns that some kids were becoming addicted to the smartphone game. The rules limit players under the age of 12 to one hour of playing per day and then blocks access to the game after 9pm. Users between 12- and 18–years-old have a two-hour daily limit.

“There are no rules to prevent indulgence in mobile games in China, but we decided to be the first to try to dispel parental worries by limiting play time and forcing children to log off,” Tencent said on its official WeChat account. Tencent described its controls as the “most serious anti-addiction message in history.”

2018: Digital contracts This year Tencent is looking to introduce digital contracts to its videogames, allowing parents and children to agree on a reasonable amount of play time. Children will then have the ability to earn more play time by doing housework or reaching certain academic scores. Within the process, “children can ask their friends to witness the signing of the contract” according to Tencent CEO Ma Huateng.

2018: In-game spending limits and online parental surveillance system Following the WHO’s decision to officially classify “Gaming Disorder” as a mental condition, Tencent announced in July it will notify bill payers whenever an underage QQ account holder spends more than $75 cumulatively over a 30-day period.

Afterwards, a phone call will be made by Tencent’s customer service to notify their parents. Tencent first launched its guardian platform in 2017, allowing parents to link with their children’s gaming accounts to choose which games can be played and to set a credit limit. According to Tencent, after a month’s trial 76% of children’s game spending was under control and 62% of their online time was reduced (China Plus – July 2018).

2018: Verify new users against public security records In September 2018, Tencent said it would launch a registration system for Honor of Kings, meaning new users would have to input their real name for authentication through China’s public security database. This would allow Tencent to identify whether a new user is actually a minor, which then enforces “anti-addiction” rules (e.g. daily limits).

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Online Gambling More children gamble than skateboard The number of children being exposed to forms of online gambling has become increasingly debated, with the growth in gambling advertising and online participation (e.g. gambling via social media websites) being of particular concern. In the UK, gambling is now more popular than skateboarding among children according to the Responsible Gambling Strategy Board (June - 2018). A separate study by the Gambling Commission has voiced fears that children are gambling in a “consequence-free environment”; we summarise some of their key findings in Figure 24.

There is political pressure to address this issue, with an ongoing debate on how gambling companies are addressing the third licensing objective in the Gambling Act 2005 which specifically singles out children as a vulnerable group that should be protected from being harmed or exploited by gambling in the UK. We summarise below what we believe are the key industry concerns before highlighting Barclays company-specific commentary.

FIGURE 24 Setting the scene: young people & gambling

Source: Gambling Commission (2017) – A research study among 11-16 year olds in Great Britain. Refer to – DSM-IV-MR-J for the full Criteria and Test Questions (link)

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Key industry concerns...

19 September 2018

•

Gambling advertising – frequency: The Responsible Gambling Strategy Board (RGSB) warned earlier this year that Britain is conducting an “uncontrolled social experiment” on children, with 70% of 11- to 16-year-olds having been exposed to gambling advertising on social media, 80% on television and 66% on other websites. During the World Cup, betting adverts accounted for 17% of ad breaks, or roughly one minute in every six. Bookmakers and online casino companies enjoyed one and a half times as much screen time as alcohol firms and almost four times that of fast food outlets on ITV (Guardian – 15 July 2018). There is a concern the frequency of such adverts could ‘normalise’ the risks associated with gambling.

•

Gambling advertising – content & cartoon imagery: The UK Advertising Codes prevent gambling advertising from being intentionally targeted at children, with the advice specifically warning operators against the use of cartoon animals and exaggerated graphics. It also advises against using names for games which might be familiar or appealing to children, with examples of games identified including “Piggy Payout” and “Pirate Princess.” In June 2018, Coral was ordered by the advertising watchdog to drop three ads featuring colourful animated characters that could appeal to children. It found that all three ads featured animated images which were likely to be of particular appeal to under-18s and were marketing gambling products, and therefore breached the advertising code (Sky News – 20 June 2018).

•

Free-to-play casino-style games: Companies have been found to offer free-to-play casino-style games, with more than half of the 200 casino titles available in Apple’s online gaming store rated as suitable for children aged 12 and over (Daily Telegraph 19 January 2018). Given they do not allow users to gamble with money, such free games are unregulated; however, the concern is they offer a gambling experience with the associated thrills when you win.

•

Age verification: According to RGSB, 70% of gambling under-18s appears to be involved in products which are age-restricted; with age-verification procedures not always operating as effectively as they should.

•

Lack of education: There is a need to cultivate an environment where gambling is considered primarily as an activity for adults, and thus information and education have the potential to play a useful role in improving gambling safety. Schools are often suggested as a suitable location for preventative education, alongside national public health campaigns to raise the risk of gambling.

•

Social gaming: As mentioned in the Online Gaming sector contribution (page 42) betting with virtual items and ‘skins’ is just one of the forms of gambling aimed at young people; however, there are many other social-gaming apps that promote betting mechanisms such as roulette wheels and slot machines to children (YouthSight – 2018). Typically the apps have no age limit, since only virtual money is involved.

However, users are often encouraged to buy the virtual currency which YouthSight considers as making this a roundabout form of gambling.

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Barclays company commentary European Leisure Patrick Coffey +44 (0)20 3555 5955 patrick.coffey@barclays.com Barclays, UK

19 September 2018

We have long-argued that greater self-regulation is needed from UK gambling companies.

Self-regulation comes in many forms and across both Retail and Online. From an online perspective, we believe William Hill is leading the way with the recently launched ‘Nobody Harmed’ campaign. The bold objective of the campaign is to ‘eradicate problem gambling in the UK’, which we think is commendable. That said, we think this goal is impossible unless there is greater industry collaboration and an agreed measure of self-regulation. We think it is highly likely that some form of advertising ban will be introduced in the UK over the next 12-24 months. While the big brands (e.g. William Hill, Paddy Power, Betfair) will benefit on a relative basis vs. smaller online-only brands, this is still a net negative for the industry and will likely lower wagering growth rates. With the regulation tightening in the UK, we expect companies to increasingly look to diversify away from the UK and focus on bolt-on M&A outside of the UK.

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Telecom Operators Data is the new oil The emphasis on access to mobile technology is a well rehearsed hymn sheet for most mobile operators, with the current transition to 5G and the proliferation in unlimited data plans paving the future for seamless connectivity around the world. A recent report by Ofcom – A Decade of Digital Dependence (2 August 2018) – found a fifth of British adults now spend more than 40 hours a week online with smartphones being checked every 12 minutes.

Average data usage per person per month in Europe has accelerated to 3.3GB in 1Q18 vs.

2.1GB in 1Q17. In European Telco/Tech Hardware: Digital Transformers (7 September 2017) we detailed that our base case data growth CAGR is 60%.

The recent boost has been driven primarily by video consumption in a mobile environment.

We expect consumer devices with AR/VR/AI capabilities to proliferate over the coming years, with advanced smartphones like the iPhone X leading the way, making smartphones more and more attractive. Mobile data is becoming the key differentiator amongst operators alongside connectivity, with the concept of unlimited data plans now becoming the base-line expectation.

Per Figure 12, the average age for a child getting his or her first smartphone continues to fall. In 2016 the average age was 10 years, down from 12 in 2012. Telecom operators have been quick to respond to this trend, with a variety of sub-brands (e.g. Vodafone’s VOXI targeting under 30s), family/shared plans and additional services (e.g. parental control filters at BT and EE), and charity partnerships (e.g. O2 and the NSPCC). Therefore, with the risk of smartphone addiction in the under 18’s increasing, telecom operators may have an opportunity to be the ones who police user age verification when opening an account to allow parental controls to be set appropriately.

FIGURE 25 European Mobile Data per pop (GB/pop/mth)

FIGURE 26 Video streaming already half of traffic…

2.8

3.0

3.3

File share 2%

2.5

1.4

App d/l 5% Social networking 13% Audio 2%

1Q18

4Q17

3Q17

2Q17

1Q17

4Q16

3Q16

2Q16

Source: Barclays Research, Company Data

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1.9

2.1

Video 52%

1Q16

1.2

4Q15

1.1

3Q15

2Q15

1Q15

0.9 1.0

1.5

1.8

Other 20%

Web 6%

Source: Ericsson Mobility Report 2017

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Key industry concerns...

•

Free social data/zero-rated streaming: Unlimited or zero-rated pricing is becoming an increasingly popular concept for telecom operators – the demand for high bandwidth services is growing and mobile data is becoming a key differentiator. Many operators have launched tariffs that allow subscribers to use an unlimited quantity of data on selected applications (including Facebook, Instagram, Snapchat, Whatsapp and Twitter) without impacting their monthly data allowance – encouraging app usage outside of their home/in non-WiFi areas. o

DTE launched ‘Stream On’, offering a zero-rating on certain applications and TMobile US’s ‘Binge On’ programme allows customers to stream unlimited video on selected platforms. Last Summer Vodafone introduced the ‘Vodafone Pass’ which separates usage into three buckets of social media/video/messaging apps. These allow unlimited usage of the apps within each bucket for an additional monthly charge. 3UK also launched ‘Go Binge’ in the UK, which follows a similar plan.

o

Many postpaid plans now also offer additional perks including access to Spotify Premium and Now TV for no extra cost, incentivising consumers to purchase a plan with a higher data allowance and use more data.

From a consumer perspective, zero-rated plans are beneficial; subscribers are gaining access to an unlimited amount of data for a fixed price and we therefore wouldn’t expect unlimited tariffs to be given restrictions or to be abolished through tighter regulation or government driven initiatives that may be used to prevent smartphone addiction, as regulation has historically been pro-competition.

FIGURE 27 Zero-Rating Tariffs – What is included Vod Sp Pass Video?

Vod It Pass

DT StreamOn

3UK BingeOn











Music?





Social media?





€5 for music €3 for social media

€10 for Video €3 for music €5 for social media

Cost to consumer?

Requires upgrade Included in tariffs Music included in with >=4GB of data Magenta M tariff Video and Music included in L and L Plus tariffs

Source: Barclays Research, company data

However, the methods used to advertise these plans could come into question as they encourage smartphone data usage specifically focused on social media, as an example. Last year Vodafone launched its youth brand, VOXI, which targets customers under 30. Its core offering is ‘endless social data’ with the aim of breaking convention and removing allowance restrictions for young people. Although the majority of VOXI’s marketing campaigns have been via social media platforms and not on TV (tailored to its key demographic), the recent success of Love Island created a prime time slot for a TV advert (which has moved to YouTube/Instagram stories as the season ended). This advert played on the theme of ‘personal training’ - it used a smartphone screen as a treadmill and an animated hand as the runner with a trainer shouting “push yourself” essentially encouraging you to ‘scroll’ faster on the treadmill and use more of the endless data provided on their zero rated plans.

It is not unrealistic to believe that these adverts could prompt new advertising regulation to be considered, preventing the distribution of similar persuasive campaigns. Advertising has prompted the introduction of new regulation for telecoms in the past – in 2016 new UK 19 September 2018

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Barclays | Sustainable & Thematic Investing broadband regulation required operators to bundle their broadband and line rental prices into one after an Ofcom and ASA investigation found that consumers were being misled by adverts claiming there was a fixed broadband cost without the mention of a line rental cost.

FIGURE 28 Examples of VOXI ‘Endless scrolling’ video adverts

Source: @VOXI_UK Twitter

Additionally, whilst these endless data deals are advantageous for consumers, it arguably impacts net neutrality and there is concern that this may hinder innovative start-ups who do not have enough funding to “buy-in” carrier initiatives.

•

Content/security management vs. net neutrality. One of the solutions to smartphone addiction could be for network operators to block inappropriate content and monitor access to the platforms causing addiction (i.e. Facebook/Twitter/YouTube) directly.

However, uninterrupted and equal access to all sites on the internet comes under the law of net neutrality where network operators must ensure that ‘best efforts’ are made to carry data, regardless of its nature or its source (BEREC). These added controls could cause issues particularly for under 18’s as well as question where they sit under the terms of net neutrality.

In the US, the net neutrality rules have recently been repealed, which could help to manage smartphone usage as operators will not only have the ability to block website access but also have the option to bundle access to certain websites for an additional cost, or favour certain data. The nature of the EU regulation would prevent operators from taking this step and could therefore prove difficult for telecom operators to help reduce addiction. o

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BT already has controls in place. Any action taken to control consumers’ access to particular data within the EU would therefore need to be done on the consumer side. In terms of implementation, the easiest method would be an online filter that can be altered at anytime via the operator’s website. BT Parental Controls is an online extra for all customers with BT broadband and already allows parents to control which sites and times of the day that children can access the internet. The system has the option of setting a level of restriction as well as blocking certain websites during ‘Homework Time’ for example. To control usage over 3G/4G networks (which consumers are turning to more and more as mobile networks improve) customers need to separately manage access using the ‘BT Mobile Parental Controls’ filter which is accessible for any phone connected to the internet via BT’s Mobile data network. If these processes were made a necessity for all

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Barclays | Sustainable & Thematic Investing operators, then the use of popular websites and the impact of persuasive technology could be controlled and hence reduce smartphone use. o

•

Digitalisation takes the lead. As telecom operators remain focused on digitalisation, there could be potential to use the skills developed to implement security controls. As smartphone addiction awareness increases, the pressure on all contributors, telecom operators included, to take preventative measures will grow.

Operators that are able to navigate the digitisation of their businesses are well placed to manage rising competitive pressures (as per Digital Transformers, 7 September 2017). Additionally, companies such as Vodafone and KPN use established data analytics to create personalized offers and up sell customers – these capabilities could be utilized to understand if a customer is excessively using particular applications and target customer groups.

Age verification. As mentioned previously in this report, many social media platforms have minimum age requirements but are unable to verify the date of birth that users provide at registration. Telecom operators could introduce systems for age verification when a new customer joins or sets up a new phone/broadband plan, enabling them to act as the first checkpoint by guaranteeing the user’s age. We note Telefonica has already implemented a similar process in the UK as O2 automatically filters or blocks 18+ content (as classified by the British Board of Film Classification) and customers need to prove they are over 18 by providing age verification in store, online or by phone. This doesn’t require everyone to verify their age, only those who wish to use any of the BBFC filtered sites.

If age verification were made mandatory for all smartphone users, we would expect the identification process would need to be customer-friendly, ensuring convenience and simplicity. Acknowledging customer habits on all distribution channels, i.e. in store and online, is key to making sure operators capture and retain a maximum number of subscribers.

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Barclays company commentary European Telecom Services Maurice Patrick +44 (0)20 3134 3622 maurice.patrick@barclays.com Barclays, UK

The majority of the UK telecom operators already have parental control filters and web pages dedicated to online safety and educating parents of the risks to children. There is an opportunity here to also educate parents and young people on the dangers of smartphone addiction and encourage customers to use the already available controls to prevent it. A number of existing controls are aimed at parents, helping them to monitor children’s smartphone usage; however, these can be utilised by everyone to manage addiction.

Vodafone As mentioned previously, Vodafone has recently introduced a youth brand called VOXI which focuses on the ‘endless social data’ available. Their recent television campaigns could come under question if advertising regulation were introduced in response to the rise in smartphone addiction. However, Vodafone has recently introduced a ‘kid tracker’ – a watch or band with the ability to make calls and send messages and includes games as well as a GPS tracker. It is an alternative to a smartphone for when parents want to give children more independence without exposing them to the more addictive social media applications.

The watch and band themselves cost £135/£78 respectively and a V-SIM subscription (£4 per 30 day plan) would need to be purchased separately. Vodafone also offers the Red+ plan for families. The plan enables customers to add multiple SIMs under one data allowance, giving parents the option to distribute monthly data limits to each family member based on what’s appropriate and what they need from the overall limit.

BT/EE Both BT and EE provide parental control functions on their SIM cards (mentioned above), placing a particular emphasis on children’s online safety. EE’s ‘Content Lock’ allows parents to block 18-rated content and works only on the EE network – it can be accessed through the app/text/phone/online/in store. In June EE also introduced the concept of ‘data gifting’. The new service allows the owner of an EE account/family plan to transfer excess data from one member to another on the plan or on the same account if they are running low. Although this may encourage children to use their data more frivolously (by knowing that the option of receiving more is readily available), the ‘data gifting’ service also allows parents to switch their children’s data on and off.

TalkTalk Similar to BT and EE, TalkTalk offers families the ability to protect against inappropriate/suspicious content and viruses using its online filter, HomeSafe.

TEF UK In addition to the age verification process that TEF has implemented (mentioned above), O2 UK has a partnership with the NSPCC to help parents decide which device to get their child, how to manage their usage and how to control their exposure to content to ensure their safety.

Partnerships Internetmatters.org works in partnership with major operators including BT, TalkTalk, VMED and EE. With the number of young children owning a smartphone/tablet increasing (43% of children aged 12-15 own their own tablet – internetmatters.org), the website has teamed up with Pocket-Lint, an online tech website, to create a ‘parents guide to buying tech for children’. The guide focuses on the different devices available and the different esafety considerations for each. The internet matter website also highlights existing parental controls on a number of popular websites.

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APPENDIX 1 – COLLECTIVE RESPONSIBILITY Governments (educate parents, regulate tech) Digital nourishment: Similar to government-led campaigns on the risk of childhood obesity and the importance of having your ‘five-a-day’, there is a need for governments to raise awareness on digital nourishment and what constitutes healthy device usage. More specifically addressing key questions like what is the recommended daily usage by age?

What age should children get a smartphone? Consensus has not been reached on what usage should look like, and collaborating with the tech industry could help to guide discussions. To raise awareness, digital health labels (similar to food labels/nutritional guidance) could be introduced, alongside education campaigns. This could potentially reduce the burden digital rehab may have on public heath care systems in the long term if action is not taken.

How many hours should a child spend on their screens a day?

Unfortunately there is no consensus as to what constitutes as healthy usage today. The American Academy of Paediatrics recommends that for children 2 to 5 years of age, screen time should be limited to one hour per day. They believe babies are most vulnerable to screens and thus infants aged 18 months and younger should not be exposed to any digital media. However, they do acknowledge that a blanket statement doesn’t make sense all of the time (CNN – 21 October 2016).

Regulation: The use of proactive regulation to steer the technology industry in developing products that are ethical and considerate of the use by children is another option available to the government. The government could also collaborate with the technology industry to consider ways in which mandatory phone registrations and age restrictions are legally applied. For example they could make it a requirement for parents to register a phone when it is being issued to a child, with the age of the child then determining what functionalities are made available on the phone. This way, depending on the age of the child, the smartphone could monitor screen time, hours of the day the phone can be used and the availability of social media services.

Parents (lead by example, monitor usage) “Many parents feel they cannot keep up with technology and are looking for more control” Antigone Davis – Facebook Global Head of Safety (2018)

The most vulnerable party in this equation remains the parents, who in most cases are not aware of the issue and the impact overuse could be having on their children, or are even addicts themselves. A recent study in the US found that when mothers and fathers report being distracted by digital technology, this has had a negative impact on their interactions with their children (NHS Choices), and thus leading by example has a crucial role in combatting smartphone addiction. There is a need for further education on digital nourishment and what constitutes healthy device usage, with the government and the tech industry being the obvious educators. Though parental controls already exist, a better understanding of them and their use would motivate parents to become disciplined when it comes to enforcing usage limits.

School (taking action during school hours) There would be clear benefits for children in school from reducing the distraction of smartphones and the associated negative physical and mental impacts. Students would be able to focus more in lessons and engage with teachers and other students, leading to improved academic outcomes. Less time spent on their smartphone may free up more time for children to play outdoors and exercise. Children may also have improved confidence and ‘real-life’ social skills without the detrimental mental impact of addictive technologies.

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Barclays | Sustainable & Thematic Investing The UK government recognises that “technology can offer opportunities to enhance the educational experience of pupils” but, due to a growing number of teachers reporting classroom disruption, should “only be used in circumstances where the teacher has clearly defined a specific learning need they can satisfy”. In December 2017, the French government announced children won’t be allowed to bring their phones into classrooms starting in September 2018. It will apply to all pupils from the time they start school at the age of six up to 15 when they start secondary school (Guardian - 11 December 2017). The French education minister said that this was a “public health message to families” and that “it’s good that children are not too often, or even at all, in front of a screen before the age of seven.”

Two separate studies in the UK highlight the impact limiting smartphone usage can have:

• A study from the London School of Economics in 2015 found that banning smartphones in classrooms increased test scores for 16-year-old students by 6.4% and that through eliminating time lost in class over the academic year the students could benefit from the equivalent of an extra week’s worth of schooling.

• A 2015 study by Cambridge University on 14-year-old UK students showed that an extra hour of screen use per day (TV, computer, games console, phone, etc) was associated with a drop in GCSE points equivalent to dropping a grade in two subjects. Two extra hours of screen time per day was associated with a drop in GCSE points equivalent to dropping a grade in four subjects.

Workforce (improved concentration levels, increased productivity) 82% of employees keep their smartphone within eye contact CareerBuilder (2016)

Managing smartphone usage in the workplace would not only allow employees to focus on the task at hand but could also reduce the rate of absenteeism due to mental health issues associated with excessive social media use. Research commissioned by Kaspersky Lab found there was a correlation between productivity levels and the distance between a person and their smartphone. When the smartphone was removed, the performance of the participant in a concentration test improved 26%.

• According to a 2016 survey from CareerBuilder, c20% of employers think that employees are productive for less than five hours per day. 55% said the biggest source of distraction was smartphones and 48% said distractions compromise the quality of work. Three out of four employers said that two or more hours per day were lost in productivity due to having distracted workers.

• A 2013 study by Florida State University found that smartphone notifications can prompt “task-irrelevant thoughts or mind-wandering” which can lead to errors. The researchers found that the probability of making an error increased by 28% after receiving a phone call and 23% after receiving a text message.

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Smartphone usage apps: Moment, Hold, ScreenLimit A variety of apps have been developed to curb our smartphone appetite, some of which have been developed by the engineers who got us addicted in the first place.

Moment is an iOS app that automatically tracks how much people use their iPhone, iPad and Apple Watch per day. The app enables the user to set daily usage limits and to even force the user off the device if they go over the limit. The app also tracks which other apps the owner uses the most and offers a 14-day ‘Phone Bootcamp’ to help people reduce their usage.

Moment has another function called Moment Family which enables parents to manage their children’s screen time and to set up times when everyone is off their phones using the ‘family dinner time’ function.

Hold is an Android app available for students in Norway, Sweden and the UK. The app incentivises students to avoid the distraction of their phone by rewarding the user with points dependent on how long the phone is not used for. Points accumulate for every 20 minutes the student doesn’t exit out of the Hold app between the hours of 7am and 11pm. These points can then be redeemed for goods and services within the app’s marketplace. In the UK, points can be redeemed for items such as free popcorn at cinemas, free coffee and pencils, schoolbooks and footballs for Unicef.

ScreenLimit is a UK app that works across all platforms and devices (iOS, Android, Amazon Kindle Fire, and Windows) which lets parents remotely manage their children’s screen time. Each child is set a daily usage limit which can be shared between multiple devices. Children can earn extra time by completing tasks such as cleaning their room and can also have time deducted for bad behaviour. Chosen devices and apps can be blocked by the parent and educational apps and websites can be whitelisted so that they don’t use up any of the screen time limit.

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APPENDIX 2 – SUMMARY OF PARENTAL GUIDELINES FIGURE 29 Parental Guidelines Company

Parental Control Guidelines

Apple

• Apple’s Family Privacy Disclosures for Children states “We believe in transparency and giving parents the information they need to determine what is best for their child. We work hard to offer controls for parents that are intuitive and customizable.”

• Children can have their own Apple ID to enable them to use all Apple ID features as well as the Family Sharing features – sharing music, movies, TV shows, books, apps, photos, calendars, location and more with the family.

• The ‘Ask to Buy’ function allows parents to approve both in-app purchases and downloads requested by the child. This feature is enabled automatically for those under 13 years old.

• Parents can set restrictions for their child on any iOS device. This enables the parent to limit usage of features such as FaceTime, Camera and Safari and some social media apps as well as choosing appropriate content.

Samsung

• New Screen Time feature (Figure 19) introduced for parents to set limits on children’s usage.

• Once the child turns 13, they will be allowed to maintain their account without participating in Family Sharing.

• Samsung’s Privacy Policy says “We do not knowingly collect any personal information from children under the age of 13 without parental consent.” It also says that if the company learns a child has provided personal information, it will be deleted.

• Samsung offers the Samsung Kids app for tablets and smartphones. This app contains educational games, books and videos and can be controlled by the parent. Parents can set screen limits.

Google

• To own a Google Account the minimum age requirements by country are: −

United States: 13 or older, except for Google Accounts created in Family Link for kids under 13

−

United Kingdom: 13 or older

−

Spain & most of EU: 16 or older

−

South Korea: 14 or older

−

Family Link can be used for parents to create accounts for children under the minimum age. Parents can reset children’s passwords, manage android apps, set screen time limits, view usage and check the device location.

YouTube

• YouTube has a separate app called YouTube Kids for children under the age of 13. The App Store says YouTube Kids is for children aged 4 and over. The content uses a mix of filters but inappropriate videos can slip through.

• Parents can set a time limit on the YouTube Kids app, decide whether their children can search in the app, see the history, report videos and block content.

Facebook

• Facebook requires a user to be at least 13 before they can create an account.

• In December 2017, Facebook announced the creation of Messenger Kids, a standalone app that allows children under the age of 13 to use the service under the supervision of a parent.

Snapchat

• • • •

Parents will need to sign their children up for the Messenger Kids services and will have to approve any contacts.

The app has a sleep feature which gives parents the ability to turn the app off at designated times.

Snapchat’s minimum user age is 13. When the app is first launched it will ask for a date of birth.

Previously, if the user’s age was under 13 they would be redirected to the children version of the app called SnapKidz. SnapKidz allowed children to take pictures and add filters but did not allow messaging or adding friends. However, this app appears to have been discontinued.

Instagram

WhatsApp

• • • •

Instagram’s privacy policy states the app is “not directed at children under the age of 13”.

Instagram also says that people can report an account which they believe is of a child under the age of 13.

If Instagram find they have data from a child under 13, they will delete that information as quickly as possible.

WhatsApp users previously had to be at least 13 to use the service. However, WhatsApp has increased this age threshold in the EU to 16 due to data privacy regulations introduced in May 2018.

• The company asked users to confirm that they were at least 16 years old.

• WhatsApp will keep its age limit at 13 for the rest of the world.

Source: Apple, Samsung, Google, YouTube, Tech Crunch, Be Web Smart, Instagram, BBC

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APPENDIX 3 – INTERACTIVE DIGITAL HEALTH LABELS The emerging requirement for digital addiction labels Similar to the warning labels seen on alcohol, cigarettes and prescription drugs, introducing interactive digital health labels could help encourage responsible consumption through features like timers and reminders. A study by the University of Bournemouth titled The Emerging requirement for digital addiction labels (2015) advocates warning labels as an emerging ethical and professional requirement. The study found that around 32% of those experiencing problem usage thought that having some kind of warning messages and interactive labels are certainly needed, 50% thought it is likely a good idea, 15% thought it is unlikely to be useful and 3% thought it is not going to work.

FIGURE 30 Other products already have additional labelling… why not smartphones?

Source: Cigarette: standardised plain packaging - ASH, Food Standards Agency

The study considered how users would like recommendation messages to be delivered – Figure 31 – encouraging a “positive and gentle” approach. The survey also identified potential ways such messages could be delivered but acknowledged each one would depend on different factors such as the device used, the activity being done, the stage of addiction and personality type.

FIGURE 31 Content and presentation of recommendation messages The percentages represent the number of survey participants who wanted to see the following features: Usage

−

Time already spent on the software (86%)

related

−

The number of times I checked/visited the software (56%)

−

Usage “bill” like mobile bills and bank statements (47%)

−

The features which I used heavily used, e.g. Like, tagging, messaging (17%)

−

Consequences on real social life, e.g. relations breakdown (51%)

−

Effects on physiological and mental health, e.g. eye strains, tension (50%)

−

Damage on your public profile, e.g. potentially seen by employer (39%)

−

The ease and speed of information spread once shared (32%)

−

Suggestions/advice on potential interesting real life activities based on your usage, e.g. going to a social event which

Consequence related

Advice related

matches your detected online interest (44%) −

Factual and proved statements about the benefits of regulating usage styles (38%)

−

Suggestions/advice on how to regulate the usage style, e.g. using filters to reduce the amount of feeds/notification (33%)

Source: The Emerging requirement for digital addiction labels (2015) – Bournemouth University – Faculty of Science and Technology

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Design of persuasive intervention technology In a separate study conducted in 2016, Bournemouth University explored the design of persuasive intervention technology to combat digital addiction through labels. By focusing on the user’s perspective, they were able to conceptualise what could be the sources of concern from the design perspective – Figure 32.

FIGURE 32 Design concerns Sources of concerns Lack of interest

Experience fails to engage, ineffective rewarding system, poor leveling design, willingness and readiness to change

Lack of trust

Unreliable addiction scoring, lack of verifiability and transparency, uncertainty of agenda of application’s developer(s)

Lowering self-esteem

Peer pressure, upward social comparisons, low sense of selfefficacy, assigning to non-matched groups

Creating misconceptions

Addiction scoring, minimizing the seriousness of the addicting, providing non-staged matched interventions

Biased decisions

Downward social comparisons, self-set goals, flight into health, denial of reality, influence from past experience and performance

Creating addictive experience

Pull and push feedback approaches, gamified experience, creating preoccupation with targeted behaviour, poor stimulus control

Impacting user experience

Obtrusiveness, distraction, coercive techniques, affecting workflow, lack of requirements negotiations, neglect personalized experience

Unsustainable change

Social elements (e.g. conformity effect), losing interest

Self-image impact

Identification as addict, experience of relapsing

Source: Exploring the requirements and design of persuasive technology to combat digital addiction (2016) – Bournemouth University

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APPENDIX 4 – LESSONS FROM THE EAST Can the West learn from the experience of the East?

Taking a global view, countries in Asia have been experiencing severe forms of digital addiction amongst children for many years including gaming, internet, social media and smartphones. Some incidents going back as far as the early 2000s have even made international headlines. In China alone, a gaming addict died in 2004 after playing The Legend of Mir 2 for 20 hours straight, 25 people were killed in a fire in an unlicensed internet cafe in 2002 and a boy from Qingyuan attacked his father after a disagreement about his internet use in 2014. Focusing on smartphones specifically, in 2013, a Taiwanese tourist had to be rescued after walking off the end of a pier in Australia whilst checking Facebook on her phone. In 2015 a young woman fell into a drain while walking in China's Sichuan province after being distracted by her phone. The governments have tried to combat forms of digital addiction by implementing a variety of initiatives.

South Korea: Child-surveillance apps, Shutdown law (Cinderella Curfew) Educational programmes: In South Korea, a 2016 study by the Ministry of Health and Welfare found that 25% of 18-29 year old females and 12% of males in the same age group showed signs of a clinical disorder associated with smartphone use. In response to this growing concern, the government created educational programmes at schools on internet addiction and counselling guidance for students at risk of smartphone addiction.

Street signs: Seoul’s Metropolitan Government responded by introducing traffic signs warning pedestrians of the risks of being hit by a vehicle whilst using a smartphone. One of the signs reads ‘Warning: Using Smartphone While Walking’ and has a picture of a smartphone user being hit by a car (Figure 33).

Shutdown law (2011): The law, also known as the Cinderella Curfew, forbids children under the age of 16 in South Korea from playing online video games between midnight and 6am.

As of 2014, the law can be lifted upon the request of the children’s parents.

Smart Sheriff (2015): The government introduced a mandatory parental monitoring mobile app in 2015, which meant that those under 19 who bought a smartphone had to install an app to monitor their web activity, which their parents were then able to access and block access to ‘undesirable’ sites. The app was suspended later that year following security concerns.

China: Cell phones lanes, boot camps, electric shocks, gaming limits Boot camps: China was one of the first countries to label internet addiction as a clinical disorder and has opened a number of boot camp style rehabilitation clinics where treatment includes counselling alongside military discipline, drugs, hypnosis and mild electric shocks – refer to Case Study on page 63.

Cell phone lanes: City authorities in Chongqing also introduced a 30m ‘cellphone lane’ for pedestrians in 2014.

Gaming safeguards: The Chinese government banned teens from entering Web cafes in 2006, and in 2007 started requiring gaming companies to develop anti-addiction safeguards which would limit play after three hours. In 2017, China’s biggest gaming company Tencent said it would limit play time on its Honour of Kings game to one hour for under 12s and two hours for those 12-18.

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Japan: Street signs, child-friendly phones Child-friendly phones: In 2008 the government started to warn parents and schools to limit smartphone use among children, and even considered asking Japanese makers to develop cell phones with only talking functions and GPS. A smartphone named Tone m17, developed by Tone Mobile Inc, was introduced to the Japanese market in August last year. It can apparently be set to work during daytime hours only to restrict the screen time of children.

Street signs (2013): In 2013, mobile network NTT Docomo erected a sign at one of Tokyo’s main stations, Shinjuku, which reads "Walking while using a smartphone is dangerous...But those people probably didn't see this announcement."

Taiwan: Parental fines for children under two using electronic products In Taiwan, a revision to the Protection of Children and Youths Welfare and Rights Act to cover the use of electronic devices was passed in 2015. Under this regulation, parents and guardians can be fined up to NT$50,000 (c$1700) if they have allowed their children under two to use electronic products or if under-18s use electronic products to an extent that causes them to become either physically or mentally ill. However, this legislation has been criticised for not giving precise guidelines as to what excessive use is.

FIGURE 33 Lessons from Asia‌

Source: BBC , Carbonated TV, Korea Portal, Guardian (2008, 2014), Digital Trends, Wired

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China: Digital boot camps Since the establishment of the first Internet Addiction Centre in 2004, hundreds of other similar military-style treatment centres have opened around China. Beijing’s Military General Hospital was the first centre and developed by Tao Ran, a military researcher and colonel in the People's Liberation Army who was well known for treating drug addicts. The centre was located at the edge of Beijing in a fortified military compound. According to Wired (13 January 2010), in the six years to 2010 the centre treated over 5,000 people, most of whom were in their teens. The camp received international acclaim and similar centres began opening throughout Asia in South Korea, Thailand and Vietnam. The boot camps in China use varying treatments including antidepressants, counselling, intense physical exertion and in the past included electroshock therapy.

Some of the treatment centred around physical exercise, with one centre reportedly sending its young clients on a 528 mile hike through Inner Mongolia. The treatment regime at Qihang Salvation Camp revolves around intense martial drills beginning at sunrise and sometimes not ending until after midnight. Patients who are unable to complete the exercises were reportedly beaten with one child in 2009 dying on his first day of treatment.

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Barclays | Sustainable & Thematic Investing ANALYST(S) CERTIFICATION(S): We, Hiral Patel, Emily Morrison, Anushka Challawala, Ross Sandler, Gregory Zhao, Ryan Gee, Maurice Patrick, Nick Dempsey and Patrick Coffey, hereby certify (1) that the views expressed in this research report accurately reflect our personal views about any or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this research report.

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Sustainable & Thematic Investing Adeline Diab +44 (0)20 3134 1578 adeline.diab@barclays.com Barclays, UK

Deborah Taylor +44 (0)20 7773 8418 deborah.taylor@barclays.com Barclays, UK

Kristina Church +44 (0)20 3134 2199 kristina.church@barclays.com Barclays, UK

Emily Morrison + 44 (0)20 7773 9080 emily.morrison@barclays.com Barclays, UK

Anushka Challawala +44 (0)20 3134 2326 anushka.challawala@barclays.com Barclays, UK

Katherine Ogundiya +44 (0)20 3134 1391 katherine.a.ogundiya@barclays.com Barclays, UK

BARCRES-63852b76

Hiral Patel +44 (0)20 3134 1618 hiral.patel@barclays.com Barclays, UK