US operators belatedly act to protect user location data

AT&T and Verizon announced that they will terminate all remaining commercial agreements that involve sharing customer location data, following a report exposing the country’s mobile carriers’ failure to control data sharing flow.

Jim Greer, a spokesman for AT&T, said in a standard email to media: “Last year, we stopped most location aggregation services while maintaining some that protect our customers, such as roadside assistance and fraud prevention.” Referring to the Motherboard exposé, Greer continued, “In light of recent reports about the misuse of location services, we have decided to eliminate all location aggregation services — even those with clear consumer benefits.”

This is similar to the position T-Mobile’s CEO John Legere adopted when responding to the criticism from the US Senator Ron Wyden (D-Ore.). Verizon also announced that the company will sever four remaining contracts to share location data with roadside assistance services. After this Version will need to get customers’ explicit agreement to share their data with these third-party assistance companies. Sprint, which was also caught out by the Motherboard report, is the only remaining nation-wide carrier that has not announced its plan on the issue.

This is all good news for the American consumers who are concerned with the safety of their private data. On the other hand, mobile operators have hardly been the worst offenders when it comes to compromising the privacy and security of customer data. Earlier, Google was exposed to have continued tracking users’ location even after the feature had been switched off, while Facebook has been mired in endless privacy controversies.

Monetising user data is only a side and most likely insignificant “value-add” business for the mobile operators, because they live on the service fees subscrbers pay. But it is the internet heavyweights’ lifeline. This may sound fatalistic but it should not surprise anyone if the Facebooks and the Googles of the world come up with more innovative measures to finance the “free” services we have benn used to.

The biggest stories of 2018 all in one place

2018 has been an incredibly business year for all of us, and it might be easy to forget a couple of the shifts, curves, U-turns and dead-ends.

From crossing the 5G finish line, finger pointing from the intelligence community, the biggest data privacy scandal to date and a former giant finally turning its business around, we’ve summarised some of the biggest stories of 2018.

If you feel we’ve missed anything out, let us know in the comments section below.

Sanction, condemnation and extinction (almost)

ZTE. Three letters which rocked the world. A government-owned Chinese telecommunications vendor which can’t help but antagonise the US government.

It might seem like decades ago now but cast your mind back to April. A single signature from the US Department of Commerce’s Bureau of Industry and Security (BIS) almost sent ZTE, a company of 75,000 employees and revenues of $17 billion, to keep the dodo company.

This might have been another move in the prolonged technology trade war between the US and China, but ZTE was not innocent. The firm was caught red-handed trading with Iran, a country which sits very prominently on the US trade sanction list. Trading with Iran is not necessarily the issue, it’s the incorporation of US components and IP in the goods which were sent to the country. ZTE’s business essentially meant the US was indirectly helping a country which was attempting to punish.

The result was a ban, no US components or IP to feature in any ZTE products. A couple of weeks later manufacturing facilities lay motionless and the company faced the prospect of permanent closure, such was its reliance on the US. With a single move, the US brought one of China’s most prominent businesses to its knees.

Although this episode has been smoothed over, and ZTE is of course back in action, the US demonstrated what its economic dirty bombs were capable of. This was just a single chapter in the wider story; the US/China trade war is in full flow.

Tinker, tailor, Dim-sum, Spy

This conflict has been bubbling away for years, but the last few months is where the argument erupted.

Back in 2012, a report was tabled by Congressman Mike Rogers which initially investigated the threat posed by Chinese technology firms in general, and Huawei specifically. The report did not produce any concrete evidence, though it suggested what many people were thinking; China is a threat to Western governments and its government is using internationally successful companies to extend the eyes of its intelligence community.

This report has been used several times over the last 12 months to justify increasingly aggressive moves against China and its technology vendors. During the same period, President Trump also blocked Broadcom’s attempts to acquire Qualcomm on the grounds of national security, tariffs were imposed, ZTE was banned from using US technologies in its supply chain and Huawei’s CFO was arrested in Canada on the grounds of fraud. With each passing month of 2018, the trade war was being cranked up to a new level.

Part of the strategy now seems to be undermining China’s credibility around the world, promoting a campaign of suggestion. There is yet to be any evidence produced confirming the Chinese espionage accusations but that hasn’t stopped several nations snubbing Chinese vendors. The US was of course the first to block Huawei and ZTE from the 5G bonanza, but Australia and Japan followed. New Zealand seems to be heading the same way, while South Korean telcos decided against including the Chinese vendors on preferred supplier lists.

The bigger picture is the US’ efforts to hold onto its dominance in the technology arena. This has proved to be incredibly fruitful for the US economy, though China is threatening the vice-like grip Silicon Valley has on the world. The US has been trying to convince the world not to use Chinese vendors on the grounds of national security, but don’t be fooled by this rhetoric; this is just one component of a greater battle against China.

Breakaway pack cross the 5G finish line

We made it!

Aside from 5G, we’ve been talking about very little over the last few years. There might have been a few side conversations which dominate the headlines for a couple of weeks, but we’ve never been far away from another 5G ‘breakthrough’ or ‘first’. And the last few weeks of 2018 saw a few of the leading telcos cross the 5G finish line.

Verizon was first with a fixed wireless access proposition, AT&T soon followed in the US with a portable 5G hotspot. Telia has been making some promising moves in both Sweden and Estonia, with limited launches aiming to create innovation and research labs, while San Marino was the first state to have complete coverage, albeit San Marino is a very small nation.

These are of course very minor launches, with geographical coverage incredibly limited, but that should not take the shine off the achievement. This is a moment the telco and technology industry has been building towards for years, and it has now been achieved.

Now we can move onto the why. Everyone knows 5G will be incredibly important for relieving the pressure on the telco pipes and the creation of new services, but no-one knows what these new services will be. We can all make educated guesses, but the innovators and blue-sky thinkers will come up with some new ideas which will revolutionise society and the economy.

Only a few people could have conceived Uber as an idea before the 4G economy was in full flow, and we can’t wait to see what smarter-than-us people come up with once they have the right tools and environment.

Zuckerberg proves he’s not a good friend after all

This is the news story which rocked the world. Data privacy violations, international actors influencing US elections, cover ups, fines, special committees, empty chairs, silly questions, knowledge of wrong-doing and this is only what we know so far… the scandal probably goes deeper.

It all started with the Cambridge Analytica scandal, and a Russian American researcher called Aleksandr Kogan from the University of Cambridge. Kogan created a quiz on the Facebook platform which exposed a loop-hole in the platform’s policies allowing Kogan to scrape data not only from those who took the quiz, but also connections of that user. The result was a database containing information on 87 million people. This data was used by political consulting firm Cambridge Analytica during elections around the world, creating hyper-targeted adverts.

What followed was a circus. Facebook executives were hauled in-front of political special committees to answer questions. As weeks turned into months, more suspect practices emerged as politicians, journalists and busy-bodies probed deeper into the Facebook business model. Memos and internal emails have emerged suggesting executives knew they were potentially acting irresponsibly and unethically, but it didn’t seem to matter.

As it stands, Facebook is looking like a company which violated the trust of the consumer, has a much wider reaching influence than it would like to admit, and this is only the beginning. The only people who genuinely understand the expanding reach of Facebook are those who work for the company, but the curtain is slowly being pulled back on the data machine. And it is scaring people.

Big Blue back in the black

This might not have been a massive story for everyone in the industry, but with the severe fall from grace and rise back into the realms of relevance, we feel IBM deserves a mention.

Those who feature in the older generations will remember the dominance of IBM. It might seem unusual to say nowadays, but Big Blue was as dominant in the 70s as Microsoft was in the 90s and Google is today. This was a company which led the technology revolution and defined innovation. But it was not to be forever.

IBM missed a trick; personal computing. The idea that every home would have a PC was inconceivable to IBM, who had carved its dominant position through enterprise IT, but it made a bad choice. This tidal wave of cash which democratised computing for the masses went elsewhere, and IBM was left with its legacy business unit.

This was not a bad thing for years, as the cash cow continued to grow, but a lack of ambition in seeking new revenues soon took its toll. Eight years ago, IBM posted a decline in quarterly revenues and the trend continued for 23 consecutive periods. During this period cash was directed into a new division, the ‘strategic imperatives’ unit, which was intended to capitalise on a newly founded segment; intelligent computing.

In January this year, IBM proudly posted its first quarterly growth figures for seven years. Big Blue might not be the towering force it was decades ago, but it is heading in the right direction, with cloud computing and artificial intelligence as the key cogs.

Convergence, convergence, convergence

Convergence is one of those buzzwords which has been on the lips of every telco for a long time, but few have been able to realise the benefits.

There are a few glimmers of promise, Vodafone seem to be making promising moves in the UK broadband market, while Now TV offers an excellent converged proposition. On the other side of the Atlantic, AT&T efforts to move into the content world with the Time Warner acquisition is a puzzling one, while Verizon’s purchase of Yahoo’s content assets have proved to be nothing but a disaster.

Orange is a company which is taking convergence to the next level. We’re not just talking about connectivity either, how about IOT, cyber-security, banking or energy services. This is a company which is living the convergence dream. Tie as many services into the same organisation, making the bill payer so dependent on one company it becomes a nightmare to leave.

It’s the convergence dream as a reality.

Europe’s Great Tax Raid

This is one of the more recent events on the list, and while it might not be massive news now, we feel it justifies inclusion. This developing conversation could prove to be one of the biggest stories of 2019 not only because governments are tackling the nefarious accounting activities of Silicon Valley, but there could also be political consequences if the White House feels it is being victimised.

Tax havens are nothing new, but the extent which Silicon Valley is making use of them is unprecedented. Europe has had enough of the internet giants making a mockery of the bloc, not paying its fair share back to the state, and moves are being made by the individual states to make sure these monstrously profitable companies are held accountable.

The initial idea was a European-wide tax agenda which would be led by the European Commission. It would impose a sales tax on all revenues realised in the individual states. As ideas go, this is a good one. The internet giants will find it much more difficult to hide user’s IP addresses than shifting profits around. Unfortunately, the power of the European Union is also its downfall; for any meaningful changes to be implemented all 28 (soon to be 27) states would have to agree. And they don’t.

Certain states, Ireland, Sweden and Luxembourg, have a lot more to lose than other nations have to gain. These are economies which are built on the idea of buddying up to the internet economy. They might not pay much tax in these countries, but the presence of massive offices ensure society benefits through other means. Taxing Silicon Valley puts these beneficial relationships with the internet players in jeopardy.

But that isn’t good enough for the likes of the UK and France. In the absence of any pan-European regulations, these states are planning to move ahead with their own national tax regimes; France’s 3% sales tax on any revenues achieved in the country will kick into action on January 1, with the UK not far behind.

What makes this story much more interesting will be the influence of the White House. The US government might feel this is an attack on the prosperous US economy. There might be counter measures taken against the European Union. And when we say might, we suspect this is almost a certainty, such is the ego of President Donald Trump.

This is a story which will only grow over the next couple of months, and it could certainly cause friction on both sides of the Atlantic.

Que the moans… GDPR

GDPR. The General Data Protection Regulation. It was a pain for almost everyone involved and simply has to be discussed because of this distress.

Introduced in May, it seemingly came as a surprise. This is of course after companies were given 18 months to prepare for its implementation, but few seemed to appreciate the complexity of becoming, and remaining compliant. As a piece of regulation, it was much needed for the digital era. It heightened protections for the consumer and ensured companies operating in the digital economy acted more responsibly.

Perhaps one of the most important components of the regulation was the stick handed to regulators. With technology companies growing so rapidly over the last couple of years, the fines being handed out by watchdogs were no longer suitable. Instead of defining specific amounts, the new rules allow punishments to be dished out as a percentage of revenues. This allows regulators to hold the internet giants accountable, hitting them with a suitably large stick.

Change is always difficult, but it is necessary to ensure regulations are built for the era. Evolving the current rulebook simply wouldn’t work, such is the staggering advancement of technology in recent years. Despite the headaches which were experienced throughout the process, it was necessary, and we’ll be better off in the long-run.

Next on the regulatory agenda, the ePrivacy Regulation.

Jio piles the misery on competitors

Jio is not a new business anymore, neither did it really come to being in 2018, but this was the period where the telco really justified the hype and competitors felt the pinch.

After hitting the market properly in early 2016, the firm made an impression. But like every challenger brand, the wins were small in context. Collecting 100,000s of customers every month is very impressive, but don’t forget India has a population of 1.3 billion and some very firmly position incumbents.

2017 was another year where the firm rose to prominence, forcing several other telcos out of the market and two of the largest players into a merger to combat the threat. Jio changed the market in 2017; it democratised connectivity in a country which had promised a lot but delivered little.

This year was the sweeping dominance however. It might not be the number one telco in the market share rankings, but it will be before too long. Looking at the most recent subscription figures released by the Telecom Regulatory Authority of India (TRAI), Jio grew its subscription base by 13.02 million, but more importantly, it was the only telco which was in the positive. This has started to make an impact on the financial reports across the industry, Bharti Airtel is particularly under threat, and there might be worse to come.

For a long-time Jio has been hinting it wants to tackle the under-performing fixed broadband market. There have been a couple of acquisitions in recent months, Den Networks and Hathway Cable, which give it an entry point, and numerous other digital services initiatives to diversify the revenue streams.

The new business units are not making much money at the moment, though Jio is in the strongest position to test out the convergence waters in India. Offering a single revenue stream will ensure the financials hit a glass ceiling in the near future, but new products and aggressive infrastructure investment plans promise much more here.

We’re not too sure whether the Indian market is ready for mass market fixed broadband penetration, there are numerous other market factors involved, but many said the initial Jio battle plan would fail as well.

Convergent business models are certainly an interesting trend in the industry, and Jio is looking like it could force the Indian market into line.

Redundancies, redundancies, redundancies

Redundancy is a difficult topic to address, but it is one we cannot ignore. Despite what everyone promises, there will be more redundancies.

Looking at the typical telco business model, this is the were the majority have been seen and will continue to be seen. To survive in the digitally orientated world, telcos need to adapt. Sometimes this means re-training staff to capitalise on the new bounties, but unfortunately this doesn’t always work. Some can’t be retrained, some won’t want to; the only result here will be redundancies.

BT has been cutting jobs, including a 13,000-strong cull announced earlier this year, Deutsche Telekom is trimming its IT services business by 25%, the merger between T-Mobile and Sprint will certainly create overlaps and resulting redundancies, while Optus has been blaming automation for its own cuts.

Alongside the evolving landscape, automation is another area which will result in a headcount reduction. The telcos will tell you AI is only there to supplement human capabilities and allow staff to focus on higher value tasks, but don’t be fooled. There will be value-add gains, but there will also be accountants looking to save money on the spreadsheets. If you can buy software to do a simple job, why would you hire a couple of people to do it? We are the most expensive output for any business.

Unfortunately, we have to be honest with ourselves. For the telco to compete in the digital era, new skills and new business models are needed. This means new people, new approaches to software and new internal processes. Adaptation and evolution is never easy and often cruel to those who are not qualified. This trend has been witnessed in previous industrial revolutions, but the pace of change today means it will be felt more acutely.

Redundancy is not a nice topic, but it is not always avoidable.

Google has apparently pulled the plug on its censored search engine for China

Google bowed to pressure by terminating its data analysis system that is vital to its planned re-entry into China with a censored search engine.

Dragonfly, the Google project to develop a search engine that would satisfy China’s censorship requirements relies on pre-empting the appearance of search results that the Chinese authorities may find offensive. To do so, Google has used 265.com, a Chinese internet portal based in Beijing it purchased in 2008, two years before it pulled out of China, to gather user behaviour data, mainly search habits. The Google team then compare what the users would see if the same search terms were used on the uncensored Google and eliminate those sites that are blocked by China’s Great Firewall. The data is then fed into the prototype Dragonfly search engine to produce results that would be acceptable to the Chinese censorship system.

According to a new report from the website The Intercept, Google has decided to shut down this data analysis system it has established with Baidu, which the search on 265.com is directed to, to harvest data. Instead the engineering team is using search queries by Chinese speaking users in other markets like the US or south-eastern Asian countries, which would be very different from what the users behind the Great Firewall would be generating and therefore defeating the very purpose of a censored search engine. Though this decision may not have explicitly spelt the death penalty for Dragonfly, it is a very close one.

A couple of factors must have played important parts in the decision-making process. Employee revolt is the first one. When Dragonfly was first exposed, an increasing number of employees have signed an internal petition to stop the project, reminiscing the company’s “Don’t Be Evil” manifesto. The very idea that Google would ponder creating a censored version for China may be a shock to most employees, but not unimaginable considering the different leaderships. Sergey Brin, who was at the helm of Google when the company shut down its China operation in 2010 as a protest, spent his childhood in the former Soviet Union, therefore had first-hand understanding of what censorship is about. Sundar Pichai, on the other hand, lacks similar sense and sensibility, having grown up in India, the largest democracy in the world.

Another source of internal pressure has come from the Privacy and Security teams. It has been reported by different media outlets that Scott Beaumont, Google’s head of China operation and the main architect behind Dragonfly, has deliberately kept the privacy and security teams in the dark as long as possible. For a company of Google’s nature, which lives on users’ trust in its willingness and capabilities to guard the security of their data, protests from these internal teams must have had the management ears. On the other hand, the fact that executives like Beaumont could carry on his secret project as long as it has must be a surprise to outside observers.

The strongest external pressure has come from the Congress. Pichai was grilled by the American law-makers last week when he was challenged by the Congressman David Cicilline (D-R.I). “It’s hard to imagine you could operate in the Chinese market under the current government framework and maintain a commitment to universal values, such as freedom of expression and personal privacy.” Pichai conceded that there was “no plans to launch a search service in China,” though he had declined to provide a positive confirmation to the Congress’ demand that Google should not launch “a tool for surveillance and censorship in China”.

With the latest decision to terminate data harvesting from 265.com, it seems Dragonfly or similar projects are put into a long hibernation.

EU passed new telecom rules to promote 5G

The telecom ministers gave final approval to the new European Electronic Communications Code to encourage competition, promote new technologies, as well as protect consumer interests.

It has been a busy couple of weeks in Brussels. The telecom configuration of the Council of the European Union, composed of the government ministers whose portfolios cover telecom, gave the final seal of approval to the European Electronic Communications Code. This came after the European Parliament (composed of elected MEPs) voted in favour of the Code in mid-November, and after a year after the European Council (composed of heads of governments) reached an agreement on the rules.

More than two years in the making, the Code covers mainly four areas: the ubiquitous and unconstrained connectivity; the harmonisation of the competences of national regulatory authorities (NRAs); the harmonisation of spectrum-related issues, and revised rules on services. While harmonisation is the key to regulator operations and the rules governing radio frequencies across all member states, a few specific points stood out:

  • When it comes to 5G, the Code advocates for “binding and enforceable rules for enhancing coordination of spectrum management in the EU with greater focus on adapting spectrum rules to the future 5G challenges”. The European Commission (the executive branch responsible for the day-to-day operation of the EU) and NRAs will “review elements of individual Member States’ planned national assignment procedures which have more impact on market and business developments. Moreover, this option will place greater emphasis on the investment environment for dense 5G networks.”
  • On services, all member states will set up a public warning system to further strengthen the protection of residents. A ‘reverse 112′ system will be put into place send alerts to people’s mobile phones in the event of a natural disaster, terrorist attack or other major emergency in their area. It needs to be in operation within three-and-a-half years of the Code entering into force (see below).
  • On consumer rights protection, the Code will extend the same applicability of the rules to services provided over the internet, for example mobile apps. “Member States will also have to establish rules for compensation in case of misconduct by providers of electronic communications networks or services.”

The Council also approved the new remit of the Body of European Regulators for Electronic Communications (BEREC), the EU-wide telecom regulator. The office is tasked to create “an investment-friendly and pro-competitive framework which will lay the groundwork for the development of 5G across Europe.” New rules on cross-country calls and messages were also passed: the retail price of intra-EU mobile or fixed calls from the consumer’s home country to another EU country will be capped at 19 cents per minute. The cap for intra-EU text messages will be 6 cents per message.

Both regulations approved by the council of ministers are to be signed by the European Council and the European Parliament on 12 December and published in the EU Official Journal on 17 December. Both acts will enter into force 3 days after publication. Member states will have two years’ transition period before the Code needs to be transposed into national laws.

The Council also reviewed the progress of the ePrivacy Regulation. The proposal is aimed to aligned with GDPR and to cover applications such as instant messaging, VoIP, and other web-based communication tools. In November the telecom ministers agreed to delay the vote on the bill, which means the regulation is unlikely to be adopted before the next European election in May 2019.

Zuckerberg absent again; Facebook doesn’t seem to want to help itself

Facebook is a company which is consistently under fire for a rap sheet which seems to longer with each passing day, but you have to wonder why it seems to be constantly compounding the problem by irritating lawmakers.

A picture speaks a thousand words, and the tweet below is giving a very simple message to the world; Facebook is bigger and more important than your feeble politicians.

Of course, the company will contest this interpretation, insisting it is doing everything possible to help politicians understand how they can build a bigger and brighter digital world, but with CEO Mark Zuckerberg continuing to ignore calls to attend examinations, there is a bit of a contradiction appearing. All he is doing is agitating politicians and offering up ammunition for haters to attack the platform and its executives.

Some might suggest, as Lord Richard Allan, Facebook’s Director for Policy in Europe, has done that Zucks cannot commit to every request. He has attended a couple, though the Department of Digital, Culture, Media and Sport has played a blinder here. They have ensured the representatives of nine nations, representing almost 500 million people, are all in the same place at the same time. Surely Zucks could squeeze this one into his schedule as it is much more efficient? No, apparently not.

What we are seeing at the moment is a game of chess, and Facebook is losing. The rules are going to change in the future, governing how companies like Facebook can make money, and the longer Zuckerberg continues to irritate legislators and regulators with his absence, the less influence Facebook will have in crafting these rules. This short exchange between Lord Allan and Chairman of the DCMS Committee Damian Collins demonstrates this point very well:

Collins: I put it to you that you have lost the trust of the international community to self-police and that we have to start looking at a method of holding you and your company to account, because Mr Zuckerberg, who is not here, does not appear willing to do the job himself.

Lord Allan: Again, I am going to agree with you. One of the areas that I am working on right now is precisely to understand the kind of regulatory framework that is in everyone’s interest. We have accepted, and Mr Zuckerberg has said himself that we accept, that this requires a regulatory framework and action by responsible companies like ours. It is the two in tandem, and as we go on to discuss false news and elections, I think the regulatory piece is going to be a really important part of that.

Collins: I don’t think it is up to Facebook to determine what regulatory structure it should be under. It should be up to Parliaments to determine that and that is why we here.

This short exchange demonstrates the position Facebook is walking itself into. In years gone, when people liked and trusted Facebook, the team might have been able to influence regulation which dictated how the business could be run. But scandals and a persistent insistence to irritate politicians has changed this. Facebook is being pushed outside the tent, the politicians are building the case against the company and it doesn’t seem to want to repair the broken bonds.

Every single time Zuckerberg refuses to attend one of these sessions he is giving the impression that such tasks are below him. Send one of the minions instead with prompt cards emblazoned with “I’ll get back to you on that one”. That is a phrase which has been consistently repeated, though as several of the politicians in this affair pointed out, Facebook is going to have to get back to them eventually. They won’t simple forget and move onto the next scandal.

Ian Lucas, another MP on the committee, pointed out Zuckerberg had promised the US Senate Committee a list of companies Facebook had banned due to violations of the platforms rules. This promise was made months ago and the list is yet to emerge. The “I’ll get back to you on that one” answer has run its course, and will just become another irritation to the politicians. Soon enough Facebook will have to deliver on the promises.

This scandal is growing day-by-day and the Facebook public relations team is looking woefully underqualified. The absence of Mark Zuckerberg has been well documented here, but all it is doing is compounding the political and PR sh*t-storm which is swirling around the company. Politicians are building the public hatred and mistrust towards the brand, and Zuckerberg is burying his head in the sand.

Google faces GDPR complaints over user location tracking

Seven privacy advocacy groups will be reporting Google to their relevant data protection authority, claiming the firm is violating GDPR through location tracking of users.

Forbrukerrådet (Norway), Consumentenbond (The Netherlands), Ekpizo (Greece), dTest (Czech Republic), Zveza Potrošnikov Slovenije (Slovenia), Federacja Konsumentów (Poland) and Sveriges Konsumenter (Sweden) will all file complaints, while vzbv in Germany is considering action for an injunction and the  Transatlantic Consumer Dialogue will bring it to the attention of the Federal Trade Commission. This is of course not the first time Google has faced complaints in the EU over privacy, but the volume here might cause a headache.

The complaint is a simple one. Even if a dataset has been anonymised by Google, detailed information on that users location can make this irrelevant, while in-depth and personal insights can be learned, violating user rights to privacy. For example, if a smartphone is stationary for eight hour consistently, at the same time every night, it would be a fair assumption this is the home address of the person, while learning about what bars they visit could give away the sexual persuasion of the individual.

Not only are these insights which can be used for personalised advertising, but the data can be sold onto other companies to dictate was services are sold to that individual at what price. An insurance company could up premiums for someone who never visits the gym, but this is not personal information which the individual has given permission to be released. Some would argue it is an invasion of privacy, others would suggest it is statistical science and fair game.

One of the complaints being made against Google is the lack of transparency. Yes, Google has made the consumer aware it collects information when the opt-outs are not altered in ‘location history’ settings tabs, though it has not made the user aware this opt-out could be irrelevant. By using other apps and services, Google is collecting the data in any case. Once it is said out loud it should seem obvious, even if you have opted out when you want to use the Maps app, you will have to send Google your location data, but the slight contradiction has the capacity to confuse users. This is not what many would consider complete transparency.

“Google’s practices leave consumers very little choice other than providing their location data, which is then used by the company for a wide range of purposes including targeted advertising,” European privacy group BEUC said in a statement. “BEUC and its members argue that these practices contradict basic principles of the GDPR, such as the lawfulness, transparency and fairness of processing, and infringe on data subject’s rights such as the right to information. In our assessment Google notably lacks a lawful legal ground for processing the location data in question.”

There will of course be investigations over the course of the next couple of months, as we suspect there will be more complaints filed in the near future, though this will be a test of GDPR. As a reminder, the largest fine which the EU can impose is 3% of annual turnover. Google might have been able to swallow previous fines from the EU, but this one will be a bit more difficult to justify.

Shareholders start wrestling Zuckerberg for Facebook control

Five Facebook shareholders are fighting back against Mark Zuckerberg’s control of the company he founded after several scandals have plummeted share price.

Citing privacy outrages, political influence, the proliferation of fake news and data leaks, the asset managers are hoping to raise support to remove Zuckerberg as Chairman. The reputation and credibility of Facebook as a business which can effectively operate in the digital economy has certainly been called into question, though considering Zuckerberg himself control 60% of the Facebook voting rights, it might prove to be a difficult battle.

New York City Pension Funds, Illinois state treasurer Michael Frerichs, Rhode Island state treasurer Seth Magaziner, Pennsylvania treasurer Joe Torsella, and Trillium Asset Management are the troublesome shareholders, though the filing should be viewed as nothing more than symbolic. With Zuckerberg’s control over Facebook coming close to a dictatorship, it is unlikely anything will change. That will not prevent investors from complaining however.

At the time of writing, the Facebook share price was standing at $159, having started the year at $181 and reaching a peak of $271 in July. This is the lowest since July 2017, a period which has seen Facebook get grilled by politicians over fake news and political influence, Cambridge Analytica dragging the company down and data breaches leaking personal information to nefarious actors. While Facebook will always be a target for hackers and the bottom-dwellers of the internet, the shareholders are calling into question Zuckerberg’s ability to manage the business.

“Facebook plays an outsized role in our society and our economy,” said New York City Comptroller Scott Stringer. “They have a social and financial responsibility to be transparent – that’s why we’re demanding independence and accountability in the company’s boardroom.

“We need Facebook’s insular boardroom to make a serious commitment to addressing real risks – reputational, regulatory, and the risk to our democracy – that impact the company, its shareowners, and ultimately the hard-earned pensions of thousands of New York City workers. An independent board chair is essential to moving Facebook forward from this mess, and to re-establish trust with Americans and investors alike.”

This is not the first time Zuckerberg has faced a challenge to his reign. Three of the aforementioned funds also supported a proposal in 2017 to create an independent board, though many of the largest shareholders voted against the proposal. This new filing, which also suggests the creation of an independent board chair to improve oversight, is set to feature at the 2019 AGM, with the troublesome shareholders stating they will be drumming up support over the coming months.

What is worth noting is this is not a revolutionary idea. Most other companies, especially multinationals, appoint an independent board to oversee operations and maintain transparency for shareholders. It is common business practice. Perhaps the steamroller success of Facebook and the continuous supply of profits have convinced shareholders this is not necessary at Facebook, but the declining share price is certainly something to worry about. Facebook is under pressure from numerous different governments, consumer groups and regulators, and Zuckerberg doesn’t seem to want to do much about it.

The UK is an excellent example of inaction from Zuckerberg. After ignoring numerous calls to appear in-front of a Parliamentary committee, the UK Government has threatened Zuckerberg with a summons should he ever set foot in the country again. It is difficult to imagine any other multi-national business taking this approach to criticism and condemnation.

While the filing might be nothing more than a PR statement, it is clear the shareholders are not happy with the way Zuckerberg is running the business. Unfortunately, it might appear the socially-incompetent Zuckerberg is under little pressure to do anything about it considering his voting power. Ironically, the social media giant seems the closest thing to a dictatorship the US has to offer the world.

The Children Act: US lawmakers asking to know how YouTube collects data on children

US Congressmen have demanded Google CEO answers questions on how YouTube tracks the data of minors.

Anyone who has been a parent to toddlers or pre-schoolers in the last dozen years must have felt, like it or not, YouTube has been a wonderful thing. It does not only provide occasional surrogate parenting but also delivers much genuine pleasure to the kids, from entertainment to education, with sheer silly laughter in between.

Meanwhile we have also recognised that YouTube can be a pain as much as a pleasure. The pre-roll and interstitial ads on such content are all clearly pushed at kids, in particular game and toy shopping; recommendations are based on what has been played therefore encouraging binge watching; not to mention the disturbing Peppa Pig or Micky Mouse spoof parodies that keep creeping through, a clear sign that, while you are watching YouTube, “YouTube is watching you”.

But neither the pleasure nor the pain should have been there in the first place, because, though not many of us have paid attention, “YouTube is not for children”, as the video service officially puts it. In its terms of service YouTube does require users to be 13 years and above. But, unlike Facebook, which would lock the user out unless he has an account, anyone can watch YouTube without the need of an account. An account is only needed when someone intends to upload a clip or make a comment. Even in situation like this, children can pretend to be above the age limit by inputting a faked date of birth, or simply by using someone else’s account. And YouTube has known that all along, it even teaches users how to make “family-friend videos”. Admit it or not, YouTube is for children.

Following complaints from 23 child and privacy advocacy groups to the Federal Trade Commission (FTC), two congressmen, David Cicilline (D) of Rhode Island, and Jeff Fortenberry (R) of Nebraska, sent a letter to Google’s CEO Sundar Pichai on September 17, demanding information on YouTube’s practices related to collection and usage of data of underaged users. The lawmakers invoked the Children’s Online Privacy Protection Act 1998 (COPPA), which forbids the collection, use or disclosure of children’s online data without explicit parental consent, and contrasted it with Google’s terms of service which give Google (and its subsidiaries) the permission to collect user data including geolocation, device ID, and phone number. The congressmen asked Google to address by October 17 eight questions, which are essentially related to:

  • What quantity and type of data YouTube has collected on children;
  • How YouTube determines if the user is a child, what safeguard measures are in place to prevent children from using the service;
  • How children’s content is tagged, and how this is used for targeted advertising;
  • How YouTube is positioning YouTube Kids, and why content for children is still retained on the main YouTube site after being ported to the Kids version

Google would not be the first one to fall foul of COPPA. In a recent high-profile case, FTC, which has the mandate to implement the law, fined the mobile advertising network inMobi close to $1 million for tracking users’, including children’s location information without consent.

This certainly is a headache that Google can do without. It has just been humiliated by the revelation that users’ location data was still being tracked after the feature had been turned off, not to mention the never-ending lawsuits in Europe and the US over its alleged anti-trust practices. It also, once again, highlights the privacy minefield the internet giants find themselves in.  Facebook is still being haunted by the Cambridge Analytica scandal, while Amazon’s staff were selling consumer data outright.

Nine years before COPPA came into force, an all-encompassing Children Act was passed in the UK in 1989. In one of its opening lines the Act states “the child’s welfare shall be the court’s paramount consideration.” This line was later quoted by the author Ian McEwan in his novel, titled simply “The Children Act” (which was recently made into a film of the same title). In that spirit we laud the congressmen for taking the action again YouTube’s profiteering behaviours. To borrow from McEwan, sometimes children should be protected from their pleasure and from themselves.

Apple hands Chinese government the keys to the iEmpire

On one side of the world US Politicians are attempting to ban Chinese vendors on the grounds of national security, while on the other Apple has potentially handed control of its users’ data to the Chinese government.

The new agreement, which was publicised through a WeChat post (thank you Google translate), between Guizhou-Cloud Big Data (GCBD), the original Apple partner in China, and Tianyi, China Telecom’s cloud storage business unit, will see the latter store both iCloud accounts and their encryption keys. There are ways around the suspect situation, users can elect to have data stored on different servers in other regions, though it is not a simple process.

With tensions on the rise once again between the two countries, this development is likely to be a clunky spanner in the works. Apple will point out it is simply being compliant to regulations by storing data locally, though there have been fears in recent months the set up would grant the Chinese government easier access to data. Handing control of the data over to state-owned telco China Telecom is hardly going to ease any of these worries.

The decision to move Chinese iCloud accounts onto Chinese servers was made back in January, though there was considerable criticism at the time. Apple defended its position, claiming it was the only was it could continue to offer iCloud services in the country, though Human Rights campaigner warned of the dangers to dissidents and critics of the government.

Amnesty International has pointed out on several occasions the suspect nature of the arrangement, primarily concerning local laws. The foundation claims many provisions of Chinese law offer inadequate protection to privacy, freedom of expression and other rights, therefore should GCBD be compelled legally to offer the government access to private data, there would have to be a mechanism in place to ensure the request did not violate the users’ human rights.

At the time, Apple promised there were no back-doors or suspect channels in the GCBD partnership, but this development will see all photos, notes, emails, and texts stored on government-owned servers. It is certainly a worrying change to the status quo. As it stands, access to data will now be decided by Chinese courts, with the encryption keys controlled by the state-owned telco.

Apple might have a public stance which is pro-privacy, but if local partners can be forced to decrypt data without having to consult Apple or US courts, objections from the US firm are as pointless as classical musical enthusiasts in Slough. When the Chinese government hands a request for information on the grounds of a criminal investigation, there is little which can be done to challenge or refuse the request.

The iLeader of course publicly and officially objects to invasion of users’ privacy, that is PR 101 after all, but is it actually doing anything aside from blindly hoping the situation changes at some undefined in the future. Its a position of convenience for the iChief.