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Ex-Facebook exec Kirthiga Reddy becomes first female investor at SoftBank’s Vision Fund

14:38 | 7 December

Following speculation that SoftBank is hiring a China-based team, so the Japanese investment giant has brought on a first venture partner (and first female) for its $100 billion Vision Fund.

Kirthiga Reddy, a former executive with Facebook, has taken the role and, in doing so, she becomes the first female member of SoftBank’s Vision Fund investment team. She will be based in San Carlos, Silicon Valley.

Reddy spent eight years at Facebook, mostly as managing director for its business in India and Southeast Asia before a two-year stint in the U.S. leading global partnerships.

In her new role, she will work closely with Deep Nishar, senior managing partner at SoftBank Investment Advisors who is located in the Bay Area and was previously an exec at Google and LinkedIn . Reddy said her focus will be frontier technologies such as AI, robotics, health, bio engineering, IoT and more. In a comment to Bloomberg, she revealed that she is “actively recruiting” for the firm, especially for female investors.

Kirthiga Reddy [right] is interviewed alongside India Today Group Chief Creative Officer Kalli Purie [left] in 2012 (Photo by Qamar Sibtain/India Today Group/Getty Images)

“I look forward to contributing to their mission to positively shape the future by seeking to back the boldest, most transformative optimistic, and ideas of today. Like in other investment firms, the Venture Partner role enables quick integration of new talent from non-investing backgrounds, which is a perfect fit for me. I look forward to bringing my technical and business expertise – from both enterprise and consumer technology, in developed and emerging markets – to the Vision Fund team,” Reddy wrote in a post on LinkedIn announcing the move.

The Vision Fund has been criticized for an all-male cast of 10 deal-makers. SoftBank founder Masayoshi Son said in September that he has “no prejudice of any kind,” and first-in-command Rajeev Misra has led an effort to hire women for the team.

 


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FB QVC? Facebook tries Live video shopping

20:35 | 6 December

Want to run your own home shopping network? Facebook is now testing a Live video feature for merchants that lets them demo and describe their items for viewers. Customers can screenshot something they want to buy and use Messenger to send it to the seller, who can then request payment right through the chat app.

Facebook confirms the new shopping feature is currently in testing with a limited set of Pages in Thailand, which has been a testbed for shopping features. The option was first spotted by social media and reputation manager 

, and re-shared by Matt Navarra and Social Media Today. But now Facebook is confirming the test’s existence and providing additional details.

The company tells me it had heard feedback from the community in Thailand that Live video helped sellers demonstrate how items could be used or worn, and provided richer understanding than just using photos. Users also told Facebook that Live’s interactivity let customers instantly ask questions and get answers about product specifications and details. Facebook has looked to Thailand to test new commerce experiences like home rentals in Marketplace, as the country’s citizens were quick to prove how Facebook Groups could be used for peer-to-peer shopping. “Thailand is one of our most active Marketplace communities” says Mayank Yadav, Facebook Product Manager for Marketplace.

Now it’s running the Live shopping test, which allows Pages to notify fans that they’re going broadcasting to “showcase products and connect with your customers”. Merchants can take reservations and request payments through Messenger.  Facebook tells me it doesn’t currently have plans to add new partners or expand the feature. But some sellers without access are being invited to join a waitlist for the feature. It also says it’s working closely with its test partners to gather feedback and iterate on the live video shopping experience, which would seem to indicate it’s interested in opening the feature more widely if it performs well.

Facebook doesn’t take a cut of payments through Messenger, but the feature could still help earn the company money at a time when it’s seeking revenue streams beyond News Feed ads as it runs out of space their, Stories take over as the top media form, and user growth plateaus. Hooking people on video viewing helps Facebook show lucrative video ads. The more that Facebook can train users to buy and sell things on its app, the better the conversion rates will be for businesses, and the more they’ll be willing to spend on ads. Facebook could also convince sellers who broadcast Live to buy its new Marketplace ad units to promote their wares. And Facebook is happy to snatch any use case from the rest of the internet, whether it’s long-form video viewing or job applications or shopping to boost time on site and subsequent ad views.

Increasingly, Facebook is setting its sights on Craigslist, Etsy, and eBay. Those commerce platforms have failed to keep up with new technologies like video and lack the trust generated by Facebook’s real name policy and social graph. A few years ago, selling something online meant typing up a generic description and maybe uploading a photo. Soon it could mean starring in your own infomercial.

 


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Japan’s Sansan raises $26.5M to help Southeast Asia get more from business cards

07:03 | 6 December

The humble business card is a target for disruption in Southeast Asia after Japanese contacts management startup Sansan raised JPY 3 billion ($26.5 million) to expand its business into the region.

Founded way back in 2007, Sansan helps bring business intelligence to companies through a system that helps build connections between users and both internal employees and external contacts using, among other things, business cards.

“Our purpose is to use tech to enhance the utility and value of business cards,” Sansan co-founder and CEO Chikahiro Terada told TechCrunch in an interview. “They are customary for business in most parts of the world, esJapanlly japan, but there’s no easy way to digitize them.”

This new round will bring that focus to Southeast Asia, where Sansan already has an office in Singapore. The capital — which is a Series E round — was provided Japan Post Capital, T. Rowe Price, SBI Investment and DCM Ventures, and it takes Sansan to around $100 million raised to date.

Sansan claims that 7,000 corporations use its core product — also called Sansan — which helps build and organize networks. At its core, users scan another person’s business card which is then digitized, uploaded to the cloud and made part of their database. The Sansan system then allows interactions, such as meetings, calls, notes and more to be added to the entry to help track interactions. The resources are held within companies, rather than employees themselves, which means strategies around sales, marketing and more can be kept organized and centralized.

In addition, Sansan operates a LinkedIn -like service called Eight which is available for free and is linked to the core product, allowing users to update their job, company, etc without having to provide a new business card. Eight has some two million users today, according to Sansan.

Unlike LinkedIn, however, which is commonly used for finding jobs, Terada suggested that Eight and Sansan help maintain networks and increase communication and engagement.

Sansan CEO Chikahiro Terada started the business in 2006 alongside fellow co-founders Kei Tomioka, Joraku Satoru, Kenji Shiomi and Motohisa Tsunokawa

Terada — who previously worked for Oracle in Thailand — said that he sees much potential for the services in Southeast Asia, where the region’s digital economy is expected to triple by 2025, albeit with a greater focus on SMEs rather than Japan-style mega corporations.

Already, Sansan has picked up some 100 or so clients in the region — mostly by targeting Japanese corporations in Singapore — while Eight has reached 100,000 registered users across Southeast Asia since a soft launch in October 2017.

“We want to expand to globally and Singapore is our first step,” said Terada, indicating that there are future plans to look at business in India, Europe and potentially the U.S. further down the line. Elsewhere, the firm is hiring data scientists as it aims to bring additional smarts to its services.

The proposition is interesting — personally speaking I have multiple stacks of business cards sitting idle — but it remains to be seen how open businesses in Southeast Asia will be to paying for the service, even with clear benefits. Saas as a model is still establishing its roots among SMEs while there are already popular options. LinkedIn is, of course, the de facto professional social network while Facebook, which has been ramping up its efforts in that space lately, is also a popular option.

 


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Seized cache of Facebook docs raise competition and consent questions

20:07 | 5 December

A UK parliamentary committee has published the cache of Facebook documents it dramatically seized last week.

The documents were obtained by a legal discovery process by a startup that’s suing the social network in a California court in a case related to Facebook changing data access permissions back in 2014/15.

The court had sealed the documents but the DCMS committee used rarely deployed parliamentary powers to obtain them from the Six4Three founder, during a business trip to London.

You can read the redacted documents here — all 250 pages of them.

The committee has been investigating online disinformation and election interference for the best part of this year, and has been repeatedly frustrated in its attempts to extract answers from Facebook.

But it is protected by parliamentary privilege — hence it’s now published the Six4Three files, having waited a week in order to redact certain pieces of personal information.

Committee chair Damian Collins has included a summary of key issues, as the committee sees them after reviewing the documents, in which he draws attention to six issues.

Here is his summary of the key issues:

  1. White Lists Facebook have clearly entered into whitelisting agreements with certain companies, which meant that after the platform changes in 2014/15 they maintained full access to friends data. It is not clear that there was any user consent for this, nor how Facebook decided which companies should be whitelisted or not.
  2. Value of friends data It is clear that increasing revenues from major app developers was one of the key drivers behind the Platform 3.0 changes at Facebook. The idea of linking access to friends data to the financial value of the developers relationship with Facebook is a recurring feature of the documents.
  3. Reciprocity Data reciprocity between Facebook and app developers was a central feature in the discussions about the launch of Platform 3.0.
  4. Android Facebook knew that the changes to its policies on the Android mobile phone system, which enabled the Facebook app to collect a record of calls and texts sent by the user would be controversial. To mitigate any bad PR, Facebook planned to make it as hard of possible for users to know that this was one of the underlying features of the upgrade of their app.
  5. Onavo Facebook used Onavo to conduct global surveys of the usage of mobile apps by customers, and apparently without their knowledge. They used this data to assess not just how many people had downloaded apps, but how often they used them. This knowledge helped them to decide which companies to acquire, and which to treat as a threat.
  6. Targeting competitor Apps The files show evidence of Facebook taking aggressive positions against apps, with the consequence that denying them access to data led to the failure of that business

The publication of the files comes at an awkward moment for Facebook — which remains on the back foot after a string of data and security scandals, and has just announced a major policy change — ending a long-running ban on apps copying its own platform features.

Albeit the timing of Facebook’s policy shift announcement hardly looks incidental — given Collins said last week the committee would publish the files this week.

The policy in question has been used by Facebook to close down competitors in the past, such as — two years ago — when it cut off style transfer app Prisma’s access to its live-streaming Live API when the startup tried to launch a livestreaming art filter (Facebook subsequently launched its own style transfer filters for Live).

So its policy reversal now looks intended to diffuse regulatory scrutiny around potential antitrust concerns.

But emails in the Six4Three files suggest Facebook took “aggressive positions” against competing apps could spark fresh competition concerns.

In one email dated January 24, 2013, a Facebook staffer, Justin Osofsky, discusses Twitter’s launch of its short video clip app, Vine, and says Facebook’s response will be to close off its API access.

As part of their NUX, you can find friends via FB. Unless anyone raises objections, we will shut down their friends API access today. We’ve prepared reactive PR, and I will let Jana know our decision,” he writes. 

Osofsky’s email is followed by what looks like a big thumbs up from Zuckerberg, who replies: “Yup, go for it.”

Also of concern on the competition front is Facebook’s use of a VPN startup it acquired, Onavo, to gather intelligence on competing apps — either for acquisition purposes or to target as a threat to its business.

The files show various Onavo industry charts detailing reach and usage of mobile apps and social networks — with each of these graphs stamped ‘highly confidential’.

Facebook bought Onavo back in October 2013. Shortly after it shelled out $19BN to acquire rival messaging app WhatsApp — which one Onavo chart in the cache indicates was beasting Facebook on mobile, accounting for well over double the daily message sends at that time.

The files also spotlight several issues of concern relating to privacy and data protection law, with internal documents raising fresh questions over how or even whether (in the case of Facebook’s whitelisting agreements with certain developers) it obtained consent from users to process their personal data.

The company is already facing a number of privacy complaints under the EU’s GDPR framework over its use of ‘forced consent‘, given that it does not offer users an opt-out from targeted advertising.

But the Six4Three files look set to pour fresh fuel on the consent fire.

Collins’ fourth line item — related to an Android upgrade — also speaks loudly to consent complaints.

Earlier this year Facebook was forced to deny that it collects calls and SMS data from users of its Android apps without permission. But, as we wrote at the time, it had used privacy-hostile design tricks to sneak expansive data-gobbling permissions past users. So, put simple, people clicked ‘agree’ without knowing exactly what they were agreeing to.

The Six4Three files back up the notion that Facebook was intentionally trying to mislead users.

In one email dated November 15, 2013, from Matt Scutari, manager privacy and public policy, suggests ways to prevent users from choosing to set a higher level of privacy protection, writing: “Matt is providing policy feedback on a Mark Z request that Product explore the possibility of making the Only Me audience setting unsticky. The goal of this change would be to help users avoid inadvertently posting to the Only Me audience. We are encouraging Product to explore other alternatives, such as more aggressive user education or removing stickiness for all audience settings.”

Another awkward trust issue for Facebook which the documents could stir up afresh relates to its repeat claim — including under questions from lawmakers — that it does not sell user data.

In one email from the cache — sent by Mark Zuckerberg, dated October 7, 2012 — the Facebook founder appears to be entertaining the idea of charging developers for “reading anything, including friends”.

Yet earlier this year, when he was asked by a US lawmaker how Facebook makes money, Zuckerberg replied: “Senator, we sell ads.”

He did not include a caveat that he had apparently personally entertained the idea of liberally selling access to user data.

Responding to the publication of the Six4Three documents, a Facebook spokesperson told us:

As we’ve said many times, the documents Six4Three gathered for their baseless case are only part of the story and are presented in a way that is very misleading without additional context. We stand by the platform changes we made in 2015 to stop a person from sharing their friends’ data with developers. Like any business, we had many of internal conversations about the various ways we could build a sustainable business model for our platform. But the facts are clear: we’ve never sold people’s data.

Zuckerberg has repeatedly refused to testify in person to the DCMS committee.

At its last public hearing — which was held in the form of a grand committee comprising representatives from nine international parliaments, all with burning questions for Facebook — the company sent its policy VP, Richard Allan, leaving an empty chair where Zuckerberg’s bum should be.

 


0

Europe dials up pressure on tech giants over election security

18:27 | 5 December

The European Union has announced a package of measures intended to step up efforts and pressure on tech giants to combat democracy-denting disinformation ahead of the EU parliament elections next May.

The European Commission Action Plan, which was presented at a press briefing earlier today, has four areas of focus: 1) Improving detection of disinformation; 2) Greater co-ordination across EU Member States, including by sharing alerts about threats; 3) Increased pressure on online platforms, including to increase transparency around political ads and purge fake accounts; and 4) raising awareness and critical thinking among EU citizens.

The Commission says 67% of EU citizens are worried about their personal data being used for political targeting, and 80% want improved transparency around how much political parties spend to run campaigns on social media.

And it warned today that it wants to see rapid action from online platforms to deliver on pledges they’ve already made to fight fake news and election interference.

The EC’s plan follows a voluntary Code of Practice launched two months ago, which signed up tech giants including Facebook, Google and Twitter, along with some ad industry players, to some fairly fuzzy commitments to combat the spread of so-called ‘fake news’.

They also agreed to hike transparency around political advertising. But efforts so far remain piecemeal, with — for example — no EU-wide roll out of Facebook’s political ads disclosure system.

Facebook has only launched political ad identification checks plus an archive library of ads in the US and the UK so far, leaving the rest of the world to rely on the more limited ‘view ads’ functionality that it has rolled out worldwide.

The EC said it will be stepping up its monitoring of platforms’ efforts to combat election interference — with the new plan including “continuous” monitoring.

This will take the form of monthly progress reports, starting with a Commission progress report in January and then monthly reports thereafter (against what it slated as “very specific targets”) to ensure signatories are actually purging and disincentivizing bad actors and inauthentic content from their platform, not just saying they’re going to.

As we reported in September the Code of Practice looked to be a pretty dilute first effort. But ongoing progress reports could at least help concentrate minds — coupled with the ongoing threat of EU-wide legislation if platforms fail to effectively self-regulate.

Digital economy and society commissioner Mariya Gabriel said the EC would have “measurable and visible results very soon”, warning platforms: “We need greater transparency, greater responsibility both on the content, as well as the political approach.”

Security union commissioner, Julian King, came in even harder on tech firms — warning that the EC wants to see “real progress” from here on in.

“We need to see the Internet platforms step up and make some real progress on their commitments. This is stuff that we believe the platforms can and need to do now,” he said, accusing them of “excuses” and “foot-dragging”.

“The risks are real. We need to see urgent improvement in how adverts are placed,” he continued. “Greater transparency around sponsored content. Fake accounts rapidly and effectively identified and deleted.”

King pointed out Facebook admits that between 3% and 4% of its entire user-base is fake.

“That is somewhere between 60M and 90M face accounts,” he continued. “And some of those accounts are the most active accounts. A recent study found that 80% of the Twitter accounts that spread disinformation during the 2016 US election are still active today — publishing more than a million tweets a day. So we’ve got to get serious about this stuff.”

Twitter declined to comment on today’s developments but a spokesperson told us its “number one priority is improving the health of the public conversation”.

“Tackling co-ordinated disinformation campaigns is a key component of this. Disinformation is a complex, societal issue which merits a societal response,” Twitter’s statement said. “For our part, we are already working with our industry partners, Governments, academics and a range of civil society actors to develop collaborative solutions that have a meaningful impact for citizens. For example, Twitter recently announced a global partnership with UNESCO on media and information literacy to help equip citizens with the skills they need to critically analyse content they are engaging with online.”

We’ve also reached out to Facebook and Google for comment on the Commission plan.

King went on to press for “clearer rules around bots”, saying he would personally favor a ban on political content being “disseminated by machines”.

The Code of Practice does include a commitment to address both fake accounts and online bots, and “establish clear marking systems and rules for bots to ensure their activities cannot be confused with human interactions”. And Twitter has previously said it’s considering labelling bots; albeit with the caveat “as far as we can detect them”.

But action is still lacking.

“We need rapid corrections, which are given the same prominence and circulation as the original fake news. We need more effective promotion of alternative narratives. And we need to see overall greater clarity around how the algorithms are working,” King continued, banging the drum for algorithmic accountability.

“All of this should be subject to independent oversight and audit,” he added, suggesting the self-regulation leash here will be a very short one.

He said the Commission will make a “comprehensive assessment” of how the Code is working next year, warning: “If the necessary progress is not made we will not hesitate to reconsider our options — including, eventually, regulation.”

“We need to be honest about the risks, we need to be ready to act. We can’t afford an Internet that is the wild west where anything goes, so we won’t allow it,” he concluded.

Commissioner Vera Jourova also attended the briefing and used her time at the podium to press platforms to “immediately guarantee the transparency of political advertising”.

“This is a quick fix that is necessary and urgent,” she said. “It includes properly checking and clearly indicating who is behind online advertisement and who paid for it.”

In Spain regional elections took place in Andalusia on Sunday and — as noted above — while Facebook has launched a political ad authentication process and ad archive library in the US and the UK, the company confirmed to us that such a system was not up and running in Spain in time for that regional European election.

In the vote in Andalusia a tiny Far Right party, Vox, broke pollsters’ predictions to take twelve seats in the parliament — a first since the country’s return to democracy after the death of the dictator Francisco Franco in 1975.

Zooming in on election security risks, Jourova warned that “large-scale organized disinformation campaigns” have become “extremely efficient and spread with the speed of light” online. She also warned that non-transparent ads “will be massively used to influence opinions” in the run up to the EU elections.

Hence the pressing need for a transparency guarantee.

“When we allow the machines to massively influence free decisions of democracy I think that we have appeared in a bad science fiction,” she added. “The electoral campaign should be the competition of ideas, not the competition of dirty money, dirty methods, and hidden advertising where the people are not informed and don’t have a clue that they are influenced by some hidden powers.”

Jourova urged Member States to update their election laws so existing requirements on traditional media to observe a pre-election period also apply online.

“We all have roles to play, not only Member States, also social media platforms, but also traditional political parties. [They] need to make public the information on their expenditure for online activities as well as information on any targeting criteria used,” she concluded.

A report by the UK’s DCMS committee, which has been running an enquiry into online disinformation for the best part of this year, made similar recommendations in its preliminary report this summer.

Though the committee also went further — calling for a levy on social media to defend democracy. Albeit, the UK government did not leap into the recommended actions.

Also speaking at today’s presser, EC VP, Andrus Ansip, warned of the ongoing disinformation threat from Russia but said the EU does not intend to respond to the threat from propaganda outlets like RT, Sputnik and IRA troll farms by creating its own pro-EU propaganda machine.

Rather he said the plan is to focus efforts on accelerating collaboration and knowledge-sharing to improve detection and indeed debunking of disinformation campaigns.

“We need to work together and co-ordinate our efforts — in a European way, protecting our freedoms,” he said, adding that the plan sets out “how to fight back against the relentless propaganda and information weaponizing used against our democracies”.

Under the action plan, the budget of the European External Action Service (EEAS) — which bills itself as the EU’s diplomatic service — will more than double next year, to €5M, with the additional funds intended for strategic comms to “address disinformation and raise awareness about its adverse impact”, including beefing up headcount.

“This will help them to use new tools and technologies to fight disinformation,” Ansip suggested.

Another new measure announced today is a dedicated Rapid Alert System which the EC says will facilitate “the sharing of data and assessments of disinformation campaigns and to provide alerts on disinformation threats in real time”, with knowledge-sharing flowing between EU institutions and Member States.

The EC also says it will boost resource for national multidisciplinary teams of independent fact-checkers and researchers to detect and expose disinformation campaigns across social networks — working towards establishing a European network of fact-checkers.

“Their work is absolutely vital in order to combat disinformation,” noted Gabriel. “This is very much in line with our principles of pluralism of the media and freedom of expression.”

Investments will also go towards supporting media education and critical awareness, with Gabriel noting that the Commission will to run a European media education week, next March, to draw attention to the issue and gather ideas.

She said the overarching aim is to “give our citizens a whole array of tools that they can use to make a free choice”.

“It’s high time we give greater visibility to this problem because we face this on a day to day basis. We want to provide solutions — so we really need a bottom up approach,” she added. “It’s not up to the Commission to say what sort of initiatives should be adopted; we need to give stakeholders and citizens their possibility to share best practices.”

 


0

Facebook launches Watch Party for all, tests Live PiP commentating

17:00 | 27 November

Facebook Watch has failed to capture viewers with its content, so it’s hoping to differentiate through the company’s core strength: social. Today Facebook fully launches Watch Party, its co-viewing feature where users can see and comment on the same video at the same time, to all profiles and Pages around the world.

Watch Party had previously launched in Groups and been in testing with other types of accounts. But now any profile or business can post a Watch party invite to sync up with other users and simultaneously view videos they’ve discovered on Facebook.

Watch’s content lineup is still lackluster compared to YouTube, Netflix, or even Snapchat Discover. CNBC reports Facebook is giving up on younger teens that are already ditching its app, and pivoting the video hub towards an older audience. Facebook is hoping a shared experience with users commenting together on clips could make Watch more appealing, but it’s a genuinely new behavior that may prove difficult to instill.

Facebook is also testing a few other tricks to breathe life into Watch. Pages and Groups will be able to schedule a Watch Party to draw more viewers, maybe by setting up a nightly gathering. Watch Parties with lots of activity will have their comments threaded so it’s easier to follow discussions.

And most interestingly, Facebook will try allowing Watch Party hosts to go Live picture-in-picture so they can commentate in real-time. This could be a hit with celebrities, as it will make users feel like they’re sitting beside them watching TV together. Basketball star Shaq will test out the Live Commentating feature through his Page tomorrow.

Watch Party’s statistics sound impressive, with 12 million started from Groups so far, 7X more daily Watch Parties in Groups per day since its launch in July, and 8X more commenting than on non-Live/synced videos. Pages are using it to let fans binge watch playlists of their old videos, replay their TV content for users in different time zones, and let fans ask each other and the hosts questions about recipes as they cook.

But given Facebook’s 2.2 billion total monthly users, billion-plus Groups users, and the fact that measuring growth in multiples is easy when you start with a low number, the feature clearly hasn’t reached the zeitgeist yet.

Perhaps the best hope for Watch and Watch Party is a feature TechCrunch broke the news on last week. Facebook is now internally testing a Watch Party-like co-viewing feature inside Messenger. Baking the option into chat might be a lot more natural, especially in group texts. 

Facebook has been desperately trying to shift video consumption behavior from passive zombie viewing to interactive and social engagement with fellow viewers. But that only works if the content is compelling.

Beyond a reboot of MTV’s The Real World, nothing on Watch truly stands out. Facebook may need to open up its wallet and pay big for more tent pole shows to pull in users and hope they get lost commenting on clips with friends and like-minds.

 


0

Tech giants offer empty apologies because users can’t quit

21:31 | 25 November

A true apology consists of a sincere acknowledgement of wrong-doing, a show of empathic remorse for why you wronged and the harm it caused, and a promise of restitution by improving ones actions to make things right. Without the follow-through, saying sorry isn’t an apology, it’s a hollow ploy for forgiveness.

That’s the kind of “sorry” we’re getting from tech giants — an attempt to quell bad PR and placate the afflicted, often without the systemic change necessary to prevent repeated problems. Sometimes it’s delivered in a blog post. Sometimes it’s in an executive apology tour of media interviews. But rarely is it in the form of change to the underlying structures of a business that caused the issue.

Intractable Revenue

Unfortunately, tech company business models often conflict with the way we wish they would act. We want more privacy but they thrive on targeting and personalization data. We want control of our attention but they subsist on stealing as much of it as possible with distraction while showing us ads. We want safe, ethically built devices that don’t spy on us but they make their margins by manufacturing them wherever’s cheap with questionable standards of labor and oversight. We want groundbreaking technologies to be responsibly applied, but juicy government contracts and the allure of China’s enormous population compromise their morals. And we want to stick to what we need and what’s best for us, but they monetize our craving for the latest status symbol or content through planned obsolescence and locking us into their platforms.

The result is that even if their leaders earnestly wanted to impart meaningful change to provide restitution for their wrongs, their hands are tied by entrenched business models and the short-term focus of the quarterly earnings cycle. They apologize and go right back to problematic behavior. The Washington Post recently chronicled a dozen times Facebook CEO Mark Zuckerberg has apologized, yet the social network keeps experiencing fiasco after fiasco. Tech giants won’t improve enough on their own.

Addiction To Utility

The threat of us abandoning ship should theoretically hold the captains in line. But tech giants have evolved into fundamental utilities that many have a hard time imagining living without. How would you connect with friends? Find what you needed? Get work done? Spend your time? What hardware or software would you cuddle up with in the moments you feel lonely? We live our lives through tech, have become addicted to its utility, and fear the withdrawal.

If there were principled alternatives to switch to, perhaps we could hold the giants accountable. But the scalability, network effects, and aggregation of supply by distributors has led to near monopolies in these core utilities. The second-place solution is often distant. What’s the next best social network that serves as an identity and login platform that isn’t owned by Facebook? The next best premium mobile and PC maker behind Apple? The next best mobile operating system for the developing world beyond Google’s Android? The next best ecommerce hub that’s not Amazon? The next best search engine? Photo feed? Web hosting service? Global chat app? Spreadsheet?

Facebook is still growing in the US & Canada despite the backlash, proving that tech users aren’t voting with their feet. And if not for a calculation methodology change, it would have added 1 million users in Europe this quarter too.

One of the few tech backlashes that led to real flight was #DeleteUber. Workplace discrimination, shady business protocols, exploitative pricing and more combined to spur the movement to ditch the ridehailing app. But what was different here is that US Uber users did have a principled alternative to switch to without much hassle: Lyft. The result was that “Lyft benefitted tremendously from Uber’s troubles in 2018” eMarketer’s forecasting director Shelleen Shum told the USA Today in May. Uber missed eMarketer’s projections while Lyft exceeded them, narrowing the gap between the car services. And meanwhile, Uber’s CEO stepped down as it tried to overhaul its internal policies.

But in the absence of viable alternatives to the giants, leaving these mainstays is inconvenient. After all, they’re the ones that made us practically allergic to friction. Even after massive scandals, data breaches, toxic cultures, and unfair practices, we largely stick with them to avoid the uncertainty of life without them. Even Facebook added 1 million monthly users in the US and Canada last quarter despite seemingly every possible source of unrest. Tech users are not voting with their feet. We’ve proven we can harbor ill will towards the giants while begrudgingly buying and using their products. Our leverage to improve their behavior is vastly weakened by our loyalty.

Inadequate Oversight

Regulators have failed to adequately step up either. This year’s congressional hearings about Facebook and social media often devolved into inane and uninformed questioning like how does Facebook earn money if its doesn’t charge? “Senator, we run ads” Facebook CEO Mark Zuckerberg said with a smirk. Other times, politicians were so intent on scoring partisan points by grandstanding or advancing conspiracy theories about bias that they were unable to make any real progress. A recent survey commissioned by Axios found that “In the past year, there has been a 15-point spike in the number of people who fear the federal government won’t do enough to regulate big tech companies — with 55% now sharing this concern.”

When regulators do step in, their attempts can backfire. GDPR was supposed to help tamp down on the dominance of Google and Facebook by limiting how they could collect user data and making them more transparent. But the high cost of compliance simply hindered smaller players or drove them out of the market while the giants had ample cash to spend on jumping through government hoops. Google actually gained ad tech market share and Facebook saw the littlest loss while smaller ad tech firms lost 20 or 30 percent of their business.

Europe’s GDPR privacy regulations backfired, reinforcing Google and Facebook’s dominance. Chart via Ghostery, Cliqz, and WhoTracksMe.

Even the Honest Ads act, which was designed to bring political campaign transparency to internet platforms following election interference in 2016, has yet to be passed even despite support from Facebook and Twitter. There’s hasn’t been meaningful discussion of blocking social networks from acquiring their competitors in the future, let alone actually breaking Instagram and WhatsApp off of Facebook. Governments like the U.K. that just forcibly seized documents related to Facebook’s machinations surrounding the Cambridge Analytica debacle provide some indication of willpower. But clumsy regulation could deepen the moats of the incumbents, and prevent disruptors from gaining a foothold. We can’t depend on regulators to sufficiently protect us from tech giants right now.

Our Hope On The Inside

The best bet for change will come from the rank and file of these monolithic companies. With the war for talent raging, rock star employees able to have huge impact on products, and compensation costs to keep them around rising, tech giants are vulnerable to the opinions of their own staff. It’s simply too expensive and disjointing to have to recruit new high-skilled workers to replace those that flee.

Google declined to renew a contract with the government after 4000 employees petitioned and a few resigned over Project Maven’s artificial intelligence being used to target lethal drone strikes. Change can even flow across company lines. Many tech giants including Facebook and Airbnb have removed their forced arbitration rules for harassment disputes after Google did the same in response to 20,000 of its employees walking out in protest.

Thousands of Google employees protested the company’s handling of sexual harassment and misconduct allegations on Nov. 1.

Facebook is desperately pushing an internal communications campaign to reassure staffers it’s improving in the wake of damning press reports from the New York Times and others. TechCrunch published an internal memo from Facebook’s outgoing VP of communications Elliot Schrage in which he took the blame for recent issues, encouraged employees to avoid finger-pointing, and COO Sheryl Sandberg tried to reassure employees that “I know this has been a distraction at a time when you’re all working hard to close out the year — and I am sorry.” These internal apologizes could come with much more contrition and real change than those paraded for the public.

And so after years of us relying on these tech workers to build the product we use every day, we must now rely that will save us from them. It’s a weighty responsibility to move their talents where the impact is positive, or commit to standing up against the business imperatives of their employers. We as the public and media must in turn celebrate when they do what’s right for society, even when it reduces value for shareholders. And we must accept that shaping the future for the collective good may be inconvenient for the individual.

For more on this topic:

 


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UK parliament seizes cache of internal Facebook documents to further privacy probe

19:23 | 25 November

Facebook founder Mark Zuckerberg may yet regret underestimating a UK parliamentary committee that’s been investigating the democracy-denting impact of online disinformation for the best part of this year — and whose repeat requests for facetime he’s just as repeatedly snubbed.

In the latest high gear change, reported in yesterday’s Observer, the committee has used parliamentary powers to seize a cache of documents pertaining to a US lawsuit to further its attempt to hold Facebook to account for misuse of user data.

Facebook’s oversight — or rather lack of it — where user data is concerned has been a major focus for the committee, as its enquiry into disinformation and data misuse has unfolded and scaled over the course of this year, ballooning in scope and visibility since the Cambridge Analytica story blew up into a global scandal this April.

The internal documents now in the committee’s possession are alleged to contain significant revelations about decisions made by Facebook senior management vis-a-vis data and privacy controls — including confidential emails between senior executives and correspondence with Zuckerberg himself.

This has been a key line of enquiry for parliamentarians. And an equally frustrating one — with committee members accusing Facebook of being deliberately misleading and concealing key details from it.

The seized files pertain to a US lawsuit that predates mainstream publicity around political misuse of Facebook data, with the suit filed in 2015, by a US startup called Six4Three, after Facebook removed developer access to friend data.

The core complaint is an allegation that Facebook enticed developers to create apps for its platform by implying they would get long-term access to user data in return. So by later cutting data access the claim is that Facebook was effectively defrauding developers.

Since lodging the complaint, the plaintiffs have seized on the Cambridge Analytica saga to try to bolster their case.

And in a legal motion filed in May Six4Three’s lawyers claimed evidence they had uncovered demonstrated that “the Cambridge Analytica scandal was not the result of mere negligence on Facebook’s part but was rather the direct consequence of the malicious and fraudulent scheme Zuckerberg designed in 2012 to cover up his failure to anticipate the world’s transition to smartphones”.

The startup used legal powers to obtain the cache of documents — which remain under seal on order of a California court. But the UK parliament used its own powers to swoop in and seize the files from the founder of Six4Three during a business trip to London when he came under the jurisdiction of UK law, compelling him to hand them over.

According to the Observer, parliament sent a serjeant at arms to the founder’s hotel — giving him a final warning and a two-hour deadline to comply with its order.

“When the software firm founder failed to do so, it’s understood he was escorted to parliament. He was told he risked fines and even imprisonment if he didn’t hand over the documents,” it adds, apparently revealing how Facebook lost control over some more data (albeit, its own this time).

In comments to the newspaper yesterday, DCMS committee chair Damian Collins said: “We are in uncharted territory. This is an unprecedented move but it’s an unprecedented situation. We’ve failed to get answers from Facebook and we believe the documents contain information of very high public interest.”

Collins later tweeted the Observer’s report on the seizure, teasing “more next week” — likely a reference to the grand committee hearing in parliament already scheduled for November 27.

But it could also be a hint the committee intends to reveal and/or make use of information locked up in the documents, as it puts questions to Facebook’s VP of policy solutions…

More next week – Parliament seizes cache of Facebook internal papers https://t.co/129OkaGe7k

— Damian Collins (@DamianCollins)

That said, the documents are subject to the Californian superior court’s seal order, so — as the Observer points out — cannot be shared or made public without risk of being found in contempt of court.

A spokesperson for Facebook made the same point, telling the newspaper: “The materials obtained by the DCMS committee are subject to a protective order of the San Mateo Superior Court restricting their disclosure. We have asked the DCMS committee to refrain from reviewing them and to return them to counsel or to Facebook. We have no further comment.”

Facebook’s spokesperson added that Six4Three’s “claims have no merit”, further asserting: “We will continue to defend ourselves vigorously.”

And, well, the irony of Facebook asking for its data to remain private also shouldn’t be lost on anyone at this point…

Another irony: In July, the Guardian reported that as part of Facebook’s defence against Six4Three’s suit the company had argued in court that it is a publisher — seeking to have what it couched as ‘editorial decisions’ about data access protected by the US’ first amendment.

Which is — to put it mildly — quite the contradiction, given Facebook’s long-standing public characterization of its business as just a distribution platform, never a media company.

So expect plenty of fireworks at next week’s public hearing as parliamentarians once again question Facebook over its various contradictory claims.

It’s also possible the committee will have been sent an internal email distribution list by then, detailing who at Facebook knew about the Cambridge Analytica breach in the earliest instance.

This list was obtained by the UK’s data watchdog, over the course of its own investigation into the data misuse saga. And earlier this month information commissioner Elizabeth Denham confirmed the ICO has the list and said it would pass it to the committee.

The accountability net does look to be closing in on Facebook.

Even as Facebook continues to deny international parliaments any face-time with its founder and CEO (the EU parliament remains the sole exception).

Last week the company refused to even have Zuckerberg do a video call to take the committee’s questions — offering its VP of policy solutions, Richard Allan, to go before what’s now a grand committee comprised of representatives from seven international parliaments instead.

The grand committee hearing will take place in London on Tuesday morning, British time — followed by a press conference in which parliamentarians representing Facebook users from across the world will sign a set of ‘International Principles for the Law Governing the Internet’, making “a declaration on future action”.

So it’s also ‘watch this space’ where international social media regulation is concerned.

As noted above, Allan is just the latest stand-in for Zuckerberg. Back in April the DCMS committee spend the best part of five hours trying to extract answers from Facebook CTO, Mike Schroepfer.

“You are doing your best but the buck doesn’t stop with you does it? Where does the buck stop?” one committee member asked him then.

“It stops with Mark,” replied Schroepfer.

But Zuckerberg definitely won’t be stopping by on Tuesday.

 


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LinkedIn violated data protection by using 18M email addresses of non-members to buy targeted ads on Facebook

00:42 | 25 November

LinkedIn, the social network for the working world with close to 600 million users, has been called out a number of times for how it is able to suggest uncanny connections to you, when it’s not even clear how or why LinkedIn would know enough to make those suggestions in the first place.

Now, a run-in with a regulator in Europe illuminates how some of LinkedIn’s practices leading up to GDPR implementation in Europe were not only uncanny, but actually violated data protection rules, in LinkedIn’s case concerning some 18 million email addresses.

The details were revealed in a report published Friday by Ireland’s Data Protection Commissioner covering activities in the first six months of this calendar year. In a list of investigations that have been reported concerning Facebook, WhatsApp and the Yahoo data breach, the DPC revealed one investigation that had not been reported before. The DPC had conducted — and concluded — an investigation of Microsoft-owned LinkedIn, originally prompted by a complaint from a user in 2017, over LinkedIn’s practices regarding people who were not members of the social network.

In short: in a bid to get more people to sign up to the service, LinkedIn admitted that it was using people’s email addresses — some 18 million in all — in a way that was not transparent. LinkedIn has since ceased the practice as a result of the investigation.

There were two parts to the supervision, as the DPC describes it:

First, the DPC found that LinkedIn in the US had obtained emails for 18 million people who were not already members of the social network, and then used these in a hashed form for targeted advertisements on the Facebook platform, “with the absence of instruction from the data controller” — that is, LinkedIn Ireland — “as is required.”

Some backstory on this: LinkedIn, Facebook and others in the lead-up to GDPR coming into effect moved data processing that had been going through Ireland to the US.

The claim was that this was to “streamline” operations but critics have said that the moves could help to shield companies a bit more from any GDPR liability over how they use process data for non-EU users.

“The complaint was ultimately amicably resolved,” the DPC said, “with LinkedIn implementing a number of immediate actions to cease the processing of user data for the purposes that gave rise to the complaint.”

Second, the DPC then decided to conduct a further audit after it became “concerned with the wider systemic issues identified” in the initial investigation. There, it found that LinkedIn was also applying its social graph-building algorithms to build networks — to suggest professional networks for users, or “undertaking pre-computation,” as the DPC describes it.

The idea here was build up suggested networks of compatible professional connections to help users overcome the hurdle of having to build networks from scratch — that being one of the hurdles in social networks for some people.

“As a result of the findings of our audit, LinkedIn Corp was instructed by LinkedIn Ireland, as data controller of EU user data, to cease pre-compute processing and to delete all personal data associated with such processing prior to 25 May 2018,” the DPC writes. May 25 was the date that GDPR came into force.

LinkedIn has provided us with the following statement in relation to the whole investigation:

“We appreciate the DPC’s 2017 investigation of a complaint about an advertising campaign and fully cooperated,” said Denis Kelleher, Head of Privacy, EMEA, for LinkedIn. “Unfortunately the strong processes and procedures we have in place were not followed and for that we are sorry. We’ve taken appropriate action, and have improved the way we work to ensure that this will not happen again. During the audit, we also identified one further area where we could improve data privacy for non-members and we have voluntarily changed our practices as a result.”

(The ‘further area’ is the pre-computation.)

There are some takeaways from the incident:

Taking LinkedIn’s words at face value, it would seem that the company is trying to show that it is acting in good faith by going one step further than simply modifying what has been identified by the DPC, changing practices voluntarily before it gets called out.

Then again, LinkedIn would not be the first company to “ask for forgiveness, not permission,” when it comes to pushing the boundaries of what is considered permissible behavior.

If you are wondering why LinkedIn did not get fined in this process — which could be one lever for pushing a company to act right from the start, rather than only change practices after getting called out — that’s because until the implementation of GDPR at the end of May, the regulator

.

What we also don’t really know here — the DPC doesn’t really address it — is where LinkedIn obtained those 18 million email addresses, and any other related data, in the first place.

Other cases reviewed in the report, such as the inquiry into Facial Recognition usage by Facebook, and how WhatsApp and Facebook share user data between each other, are still ongoing. Others, such as the investigation Yahoo security breach that affected 500 million users, are now trickling down into the companies modifying their practices.

 


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Facebook policy VP, Richard Allan, to face the international ‘fake news’ grilling that Zuckerberg won’t

20:04 | 23 November

An unprecedented international grand committee comprised of 22 representatives from seven parliaments will meet in London next week to put questions to Facebook about the online fake news crisis and the social network’s own string of data misuse scandals.

But Facebook founder Mark Zuckerberg won’t be providing any answers. The company has repeatedly refused requests for him to answer parliamentarians’ questions.

Instead it’s sending a veteran EMEA policy guy, Richard Allan, now its London-based VP of policy solutions, to face a roomful of irate MPs.

Allan will give evidence next week to elected members from the parliaments of Argentina, Brazil, Canada, Ireland, Latvia, Singapore, along with members of the UK’s Digital, Culture, Media and Sport (DCMS) parliamentary committee.

At the last call the international initiative had a full eight parliaments behind it but it’s down to seven — with Australia being unable to attend on account of the travel involved in getting to London.

A spokeswoman for the DCMS committee confirmed Facebook declined its last request for Zuckerberg to give evidence, telling TechCrunch: “The Committee offered the opportunity for him to give evidence over video link, which was also refused. Facebook has offered Richard Allan, vice president of policy solutions, which the Committee has accepted.”

“The Committee still believes that Mark Zuckerberg is the appropriate person to answer important questions about data privacy, safety, security and sharing,” she added.

“The recent New York Times investigation raises further questions about how recent data breaches were allegedly dealt with within Facebook, and when the senior leadership team became aware of the breaches and the spread of Russian disinformation.”

The DCMS committee has spearheaded the international effort to hold Facebook to account for its role in a string of major data scandals, joining forces with similarly concerned committees across the world, as part of an already wide-ranging enquiry into the democratic impacts of online disinformation that’s been keeping it busy for the best part of this year.

And especially busy since the Cambridge Analytica story blew up into a major global scandal, although Facebook’s 2018 run of bad news hasn’t stopped there…

The evidence session with Allan is scheduled to take place at 11.30am (GMT) on November 27 in Westminster. (It will also be streamed live on the UK’s parliament.tv website.)

Afterwards a press conference has been scheduled — during which DCMS says a representative from each of the seven parliaments will sign a set of ‘International Principles for the Law Governing the Internet’.

It bills this as “a declaration on future action from the parliaments involved” — suggesting the intent is to generate international momentum and consensus for regulating social media.

The DCMS’ preliminary report on the fake news crisis, which it put out this summer, called for urgent action from government on a number of fronts — including floating the idea of a levy on social media to defence democracy. However UK ministers failed to leap into action, merely putting out a tepid ‘wait and see’ response.

At next week’s press conference, grand committee members will take questions following Allan’s evidence — so expect swift condemnation of any fresh equivocation, misdirection or question-dodging from Facebook (which has already been accused by DCMS members of a pattern of evasive behavior).

Last week’s NYT report also characterized the company’s strategy since 2016, vis-a-vis the fake news crisis, as ‘delay, deny, deflect’.

The grand committee will hear from other witnesses too, including the UK’s information commissioner Elizabeth Denham who was before the DCMS committee recently to report on a wide-ranging ecosystem investigation it instigated in the wake of the Cambridge Analytica scandal.

She told it then that Facebooks needs to take “much greater responsibility” for how its platform is being used, and warning that unless the company overhauls its privacy-hostile business model it risk burning user trust for good.

Also giving evidence next week: Deputy information commissioner Steve Wood; the former Prime Minister of St Kitts and Nevis, Rt Hon Dr Denzil L Douglas (on account of Cambridge Analytica/SCL Elections having done work in the region); and the co-founder of PersonalData.IO, Paul-Olivier Dehaye.

Dehaye has also given evidence to the committee before — detailing his experience of making Subject Access Requests to Facebook — and trying and failing to obtain all the data it holds on him.

 


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