Facebook investors brush off leaked $5 billion fine

It has been widely reported that Facebook will receive a record fine for privacy violations, but investors seems strangely pleased about it.

All the usual-suspect business papers seem to have received the leak late last week that the US Federal Trade Commission voted narrowly to fine Facebook $5 billion for data privacy violations related to the Cambridge Analytica thing. The FTC, like the FCC, has five commissioners, three of which are affiliated to the Republican party and two the Democrats. As ever they voted on partisan lines, with the Democrats once more opposing the move.

The FTC has yet to make an official announcement, so we don’t know the stated reasons for the Democrat objections. But since that party seems to have decided it would have won the last general election if it wasn’t for those meddling targeted political ads, it’s safe to assume they think the fine is too lenient.

Just because the Democrats have a vested interest, that doesn’t mean they’re wrong, however. Of course Democrat politicians have criticised the decision, but many more independent commentators have noted that the fine amounts to less than a quarter’s profit for the social media giant. Nilay Patel, Editor in Chief of influential tech site The Verge, seems to speak for many in this tweet.

That Facebook’s share price actually went up after such a big fine initially seems remarkable, but all it really indicates is that Facebook had done a good job of communicating the risk to its investors, so a five bil hit was already priced in. The perfectly legitimate point, however, is that as a punishment one month’s revenue is unlikely to serve as much of a deterrent from future transgressions.

Patel seems very hostile to Facebook, stating in his opinion piece on the matter “Facebook has done nothing but behave badly from inception.” A lot of this bad behaviour consists of exploiting user data, but what is really under attack seems to be Facebook’s core business model and, to some extent, the whole-ad-funded model on which sites like The Verge rely.

Debates need to be had about the way the Internet operates and monetizes itself, but identifying Facebook as a uniquely bad actor when it comes to exploiting user data seems disingenuous. Laws and regulations are struggling to catch up with the business models of internet giants and there are many other questions to be asked about how they operate.

The fact that Facebook’s share price has now largely recovered from the Cambridge Analytica scandal of a year or so ago, as illustrated by the Google Finance screenshot below, indicates that investors consider these issues to be just another business risk, to be weighed up against obscene profits. While we have always considered the scandal to be overblown, it also seems clear that, as a meaningful punishment, even a $5 billion fine is totally inadequate in this case.

Facebook share price July 19

Google is a social media addict and it has fallen off the wagon again

Googlers just don’t know when to give up when it comes to social media as the internet giant attempts to crack the market once again with Shoelace.

It’s been almost six months since the team decided to shut-down Google+ but the search behemoth hasn’t given up just yet. We’ve lost track at how many times Google has attempted to crack this lucrative market, and the latest attempt will put much more of a hyper-local twist on the social networking euphoria.

“Shoelace is a mobile app that helps connect people with shared interests through in person activities,” the team has written in the new platforms FAQs. “It’s great for folks who have recently moved cities or who are looking to meet others who live nearby.”

Coming out of Google’s Area 120, an experimental group within the R&D business, the team will look to create a platform which will focus on uniting people in local communities and neighbourhoods depending on their interests and experiences. It is a slightly different twist to and the Google team will be hoping its fifth time lucky as it attempts to crack the code.

Starting in New York with an invite-only private test, the platform will hope to push events out to users and encourage them to create their own. This might be as simple as checking to see if anyone within a five-minute walk would want to join a kick-about in the park, or it could be to promote a comedy-night in the local pub.

On the commercial side, it makes sense. Should Google be able to scale adoption to a suitable level there will certainly be demand from advertisers, from small pubs hoping to promote bingo to larger music venues hoping to sell tickets. However, if Google can’t convince enough users to engage with the platform, what’s the point.

This is where Google has struggled before; user adoption. Google+, Google Buzz and Google Friend Connect are all examples of platforms which failed because no-one actually used them aside from Google employees. Shoelace is the latest act of defiance from a company which does not know when to quit, and it is presenting a niche idea.

Users will be able to make use of a mapping feature to browse the local area for events, yoga in the park for instance, irrelevant as to whether they are connected to an individual who is attending or not. This is where it is slightly different from other platforms, it is activity driven not connection driven. This might sound like a good USP, but it relies on the assumption users will be OK spending their time with strangers.

Each time Google has attempted to crack the social media world, there seems to be a groan from the cynics and unimaginative who have decided there are enough social media platforms already. Google does not want to give up the potential gold-mine which is social media and the fortunes of competitors demonstrate why.

Alongside Google, Facebook is recognised as a leader in the world of online advertising. The core platform, as well as Instagram and WhatsApp, are making billions for Zucks and his cronies, but they are not alone. Twitter is starting to hoover up profits while Snap is looking like a genuine business and over in China, WeChat is perhaps the most complete offering around, combining social, communication, payments and eCommerce all in one place. You can see why Google has such a fascination with social media.

Trump puts social media on notice after summit

US President Trump has made it clear that he considers social media censorship to be a major concern that may require fresh legislation and regulation.

As we previously reported, this unprecedented convention of social media influencers at the White House that took place yesterday was already causing controversy before it had even taken place. Many commentators were concerned by the apparent fact that most of the people invited were conspicuous Trump supporters.

Judging by the tweet Trump has pinned to the top of his Twitter account, the premise for the social media summit was Trump’s concern about independent voices being censored by the major social media platforms such as Twitter, Facebook and YouTube. “Each of you is fulfilling a vital role in our nation,” said Trump. “You’re challenging the media gatekeepers and the corporate censors to bring the facts straight to the American people.

“Together you reach more people than any television broadcast network by far. Free Speech is a bedrock of American life. Our constitutional rights must be fiercely protected and today I’m directing my administration to explore regulatory and legislative solutions to protect free speech and the free speech rights of all Americans. We hope to see transparency, more accountability and more freedom.”

The specifics of what was discussed are thin on the ground right now, but this is a clear shot across the bows of social media companies. Trump clearly believes there is a degree of political censorship on social media and not to his benefit. At the same time he seems to value social media as a counterbalance to the mainstream media, most of which he has been at war with for years. We have seen no public response from any of the social media giants and they would be wise to do so with care. It seems inevitable that there will be increased regulatory oversight of their censorship policies and even new laws on the matter. Bizarrely a Twitter global outage coincided precisely with the the White House gathering and Trump also took the trouble to fire a warning shot to Facebook about its Libra cryptocurrency plans, which you can see below.

Much of the mainstream media seems to have reacted with hostility to the event, putting ‘social media summit’ in scare quotes and characterising the attendees as ‘right wing’. To be fair any media that Trump has dismissed as ‘fake news’ (most of it) did have fairly good reason to feel provoked if you look at the Trump Twitter thread below, send immediately in advance of the summit. Underneath we’ll leave you with the full video of Trump’s speech at the event to make your own mind up about the relevance and utility of the event.

 

Battle lines drawn ahead of White House social media summit

US President Trump has invited a number of social media commentators to a discussion about the current digital environment.

This is being largely interpreted as an anecdotal investigation into the nature of social media censorship, with Trump having repeatedly raised his concerns on the matter. The major social media platforms don’t seem to have been invited, however, instead a selection of independent journalists, commentators and activists will be asked about their online experiences.

The White House hasn’t published a list of attendees, so here’s our own, in no particular order, derived from information already in the public domain. We’ve also included the number of Twitter followers each attendee has to provide some measure of their online influence. The summit takes place tomorrow.

  • Tim Pool – YouTube Journalist – 352k
  • James O’Keefe – Independent Journalist – 548k
  • Ben Garrison – Political Cartoonist – 176k
  • Charlie Kirk – Activist – 1.16m
  • Ali Alexander – Activist – 95k
  • Scott Presler – Activist – 226k
  • Bill Mitchell – Broadcaster – 445k
  • Carpe Donctum – Activist – 122k
  • PragerU – YouTube Commentator – 271k
  • Heritage Foundation – Think Tank – 649k
  • Media Research Center – Media Watchdog – 157k
  • Christian Ziegler – Activist – 3k

It has not gone unnoticed that nearly all of those invited are at the conservative end of the US political spectrum and Trump is known to be concerned that online censorship tends to affect conservatives disproportionately. It’s presumably not a coincidence that most of these conservatives also seem to be committed Trump supporters.

The presence of the two journalists at the top of the list indicates this will be more than just a Trump supporter love-in, however. “This event will bring together digital leaders for a robust conversation on the opportunities and challenges of today’s online environment,” a White House spokesperson is widely reported to have advised.

Pool has probably been chosen due to his high-profile grilling of Twitter on the Joe Rogan podcast, in which he argued some of its rules on speech it permits  are demonstrably biased against conservatives. Similarly O’Keefe’s organisation Project Veritas has recently claimed to have exposed similar political bias at Google.

So it seems clear that at least one of the primary purposes of this summit is to enable the US government to gather evidence of bias in social media censorship. Earlier this year the White House opened a web form inviting people to submit such evidence, so it’s possible this will have influenced who was invited too.

While much commentary has focused on the perceived political agenda of this summit, the absence of not only the big tech companies but big media too indicates another angle. There is a growing body of anecdotal evidence that social media censorship is increasingly biased against independent commentators and thus in favour of corporate, institutional, establishment voices.

Leftist independent commentator David Pakman has alleged in the video below that the YouTube recommendation algorithm has been changed in order to favour corporate over independent media. Most of the independents he cites are also leftist, indicating this isn’t a predominantly political move.

 

It is well documented that YouTube has been anxious about the effect of some of its more contentious contributors on revenues for some time and has implemented broad censorship in an apparent attempt to appease big advertisers. If there is bias in the recommendation algorithm in favour of corporate media it’s probably because advertisers also favour them, but every piece of arbitrary censorship seems to create as many problems as it solves.

Meanwhile, Twitter is where Trump spends much of his time and so is probably the platform he scrutinises most closely. A US appeals court recently ruled that it’s unconstitutional for Trump to block people on Twitter, but this precedent had led to other US politicians who have blocked people on Twitter being sued. Elsewhere Twitter’s recent decision to ban any comment that ‘dehumanizes others on the basis of religion’ seems destined to raise questions about selective enforcement.

Not to be out-done Facebook recently updated its policy regarding ‘violence and incitement’ with the guidance shown in the screenshot below.

Facebook policy screen

This seems to say that it’s OK to advocate high-severity violence (un-defined) against anyone Facebook considers to be a ‘dangerous individual’ or anyone said to be a violent criminal or sexual predator. Since Facebook explicitly identified several individuals as dangerous recently, some of those people have understandably interpreted this move as hostile to them.

That there is a growing body of evidence of a deeply flawed approach by social media companies to policing their platforms is undeniable. To what extent this involves political bias remains unclear, but Trump seems to think it does and, with the next US general election imminent, he seems increasingly disposed to bring the full force of the state against any tech companies deemed to be acting against the public, and his, interest. Those companies will doubtless be following this summit with interest.

We’ll leave you with Pool’s take on the whole thing.

 

Concerns raised about under-age social media use

Research conducted by AgeChecked has revealed concerns about the exposure young children have to social media services and some of the content on them.

Age verification service AgeChecked surveyed 1,500 UK adults and found social media in certain areas is scarily unregulated, even to the point where children using social media could potentially access pornographic content without any form of age checking. To make matters worse many 10 year olds accessing social media even though the legal age is 13.

“For parents, monitoring their childrens’ online activity has become a near-impossible task” said Alastair Graham CEO of AgeChecked. “Social media companies have a duty of care to young people, and must ensure that those who are accessing their sites meet their minimum age requirement.

“Whilst the ever-growing market of technologies can be of great benefit to children, they also pose unprecedented risks. Appropriate measures – such as robust, integrated age verification systems – must be taken to ensure young people are protected from potentially harmful material.”

68% of parents have made the claim that their child could be talking to strangers via social networking sites, according to the research. 70% have said that their child has access to disturbing video content and, maybe the worst of all, 40% have voiced the concern that their child can visit shopping sites and buy dangerous items such as knives and alcohol without being age checked.

Studies like this will add to the increasing pressure social media companies are already under to protect their users from harm. Companies like AgeChecked may have a commercial interest in promoting the importance of making sure under-age people don’t have access to inappropriate content, but that doesn’t mean they’re wrong.

Instagram experiments with benign censorship in bid to tackle bullying

Social media platform Instagram has implemented a couple of new tools that aim to take a softer approach to protecting users from harassment.

The first is designed to ‘encourage positive interactions’ but, for once, this is less Orwellian than it sounds. Instagram is using artificial intelligence to identify comments that may be considered ‘offensive’ as they are written and then presents a notification to that effect, inviting the person to think twice before publishing the comment.

The second offers to ‘protect your account from unwanted interactions’ and is even given a name: Restrict. Once you ‘restrict’ another users it makes any comments they make on your Instagram posts invisible to everyone except themselves, as well as preventing them from knowing when you’ve read their direct messages or when you’re active on the platform.

Instagram seems to be trying to minimize harm without falling into the trap of the kind of draconian blanket bans that have reflected badly on its parent company. It’s also sensitive to the fact that, in the case of bullying, victims are often reluctant to report their abusers for fear of exacerbating the problem. So offering a tool that restricts contact with another person without them knowing makes sense, especially since it doesn’t offer the power of outright censorship.

The same could also be said for the offensiveness warning. A user is apparently free to ignore it but maybe just being forced to pause before posting will prevent a lot of the spite and vitriol that social media seems to facilitate from making its way into the public domain.

Striking the right balance between freedom and safety is a core dilemma facing all social media platforms. To date they’ve largely done a bad job and have tended to over-react to specific events rather than take the lead through their own policies and technology. This Instagram initiative seems to be an attempt to change that and so should be applauded.

The potential downsides, as ever, concern vague definitions and mission creep. The perception of a comment as being offensive in intrinsically subjective, so it’s at the very least unsettling to see such a call being made by machines. Also while such messages can be ignored now, who’s to say the enforcement of this offense filter won’t become more heavy-handed in future, once everyone has accepted it?

Finally there are also distinct surveillance and data privacy implications. Does Instagram keep track of how often a user posts something its AI has deemed offensive and how often it ignores its advice to be less so? Will there eventually be more severe consequences for such behaviour? The problem with imposing any restrictions, however initially benign, is that they create the thin end of the wedge. If Instagram starts punishing its users because its HAL-like AI disapproves of them this move could start to backfire significantly.

 

US Senator moves to strip social media giants of platform status

The issue of social media censorship has caught the attention of the US Senate, where one member has proposed stripping tech giants of their legal protection as platforms.

Section 230 of the absurdly-named Communications Decency Act states “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”. It’s considered a vital piece of legislation for the internet as without it platforms such as forums, social media and YouTube wouldn’t be able to allow their users to instantly upload their own comment and content.

The key feature concerns legal protection. If you’re considered a publisher as, for example, Telecoms.com is, then you’re legally liable for everything that appears on your site as you are considered to have published it yourself. If US law views you as a platform, however, you are spared such liability because you’re deemed to have no influence over what gets whacked up on your site by its users.

When you start censoring them, however, that line becomes blurred. If, say, Facebook decides certain types of content are not allowed on its platform and actively censors them, then the implication is that it approves of everything it doesn’t censor. That, in turn could be perceived as it acting more like a publisher than a platform and should therefore lose its legal protections.

This seems to be the view of US Senator Josh Hawley, who has introduced new legislation he’s calling the Ending Support for Internet Censorship Act. “With Section 230, tech companies get a sweetheart deal that no other industry enjoys: complete exemption from traditional publisher liability in exchange for providing a forum free of political censorship,” said Hawley. “Unfortunately, and unsurprisingly, big tech has failed to hold up its end of the bargain.

“There’s a growing list of evidence that shows big tech companies making editorial decisions to censor viewpoints they disagree with. Even worse, the entire process is shrouded in secrecy because these companies refuse to make their protocols public. This legislation simply states that if the tech giants want to keep their government-granted immunity, they must bring transparency and accountability to their editorial processes and prove that they don’t discriminate.”

The long and short of it is that Section 230 protection will no longer be an automatic right for any tech company that has either: more than 30 million active monthly users in the U.S., more than 300 million active monthly users worldwide, or who have more than $500 million in global annual revenue. Instead they would have to earn that status by regularly convincing the FTC that their algorithms and content-removal practices are politically neutral.

This move has probably been urged by US President Trump, who has made it clear that he thinks social media censorship is biased against conservatives and probably thinks it’s also biased against him personally. It’s no secret that Silicon Valley is a largely Democrat, as opposed to Republican, environment and there’s plenty of anecdotal evidence of political bias in social media censorship and if this bill went through they would be under immense pressure to stop it.

The companies themselves don’t seem to have publicly commented on the proposed bill, but the internet seems split. Plenty of commentators such as the EFF and Techdirt think the move is unconstitutional and would give too much power of censorship to the government. The Verge, however, has adopted a neutral stance for now and independent YouTube Journalist Tim Pool seems to think it’s a positive development.


We think it’s right that social media companies should be stripped of their Section 230 protection if they start acting as censors, and thus publishers, but don’t think the answer is for the state to have power of censorship over them. If, instead, they just passed a law banning the censorship of all legal material that would solve the problem without making these private companies beholden to the whims of the state.

 

YouTube squirms under the contradictions of its censorship

Having initially taken a position in favour of freedom of speech, YouTube has now lurched towards censorship following public pressure.

Yesterday we told you about the matter of Vox journalist Carlos Maza versus YouTuber Steven Crowder. Crowder had frequently made mocking reference to Maza’s sexual orientation in videos he made to rebut Maza’s own videos. Maza felt this was homophobic harassment and called on YouTube to censor Crowder’s channel on the platform.

YouTube initially responded by saying that, while it didn’t endorse Crowder’s actions, they didn’t violate any of its policies and so he wouldn’t be punished. Maza was unhappy about this and made his feelings clear on Twitter. The decision quickly turned into a PR nightmare for YouTube, with most mainstream media reporting the decision as YouTube ‘tolerating’ homophobic content.

This precipitated a major rethink by YouTube, which published a couple of blog posts apparently designed to appease the many critics of its initial decision. The first was headlined ‘Our ongoing work to tackle hate’, which addressed the difficulties of policing so-called ‘hate speech’ on the platform.

“Today, we’re taking another step in our hate speech policy by specifically prohibiting videos alleging that a group is superior in order to justify discrimination, segregation or exclusion based on qualities like age, gender, race, caste, religion, sexual orientation or veteran status,” announced the post. It also said YouTube is stepping up its efforts to limit the availability of stuff that doesn’t violate its policies, but is still deemed dodgy by its own arbitrary judgment.

While that post didn’t specifically address the Maza/Crowder situation, YouTube’s second one, Taking a harder look at harassment, did and tried to tackle the free speech dilemma at hand. “If we were to take all potentially offensive content down, we’d be losing valuable speech — speech that allows people everywhere to raise their voices, tell their stories, question those in power, and participate in the critical cultural and political conversations of our day,” said the post.

Inevitably, however, YouTube found itself in the position of effectively saying ‘we’re totally in favour of free speech but…’ as all exponents of selective censorship eventually do. “Even if a creator’s content doesn’t violate our community guidelines, we will take a look at the broader context and impact, and if their behavior is egregious and harms the broader community, we may take action,” the post continued.

“In the case of Crowder’s channel, a thorough review over the weekend found that individually, the flagged videos did not violate our Community Guidelines. However, in the subsequent days, we saw the widespread harm to the YouTube community resulting from the ongoing pattern of egregious behavior, took a deeper look, and made the decision to suspend monetization. In order to be considered for reinstatement, all relevant issues with the channel need to be addressed, including any videos that violate our policies, as well as things like offensive merchandise.”

That last paragraph appears to be a clear attempt to appease its critics, but for those hoping to see Crowder kicked off YouTube, as has happened to many other ‘egregious’ content producers, merely demonetizing the channel was not enough. Maza once more took to Twitter to make his dissatisfaction clear in no uncertain terms. Crowder, meanwhile, invited Vox to subscribe to his channel.

From those two blog posts it does seem like YouTube is genuinely trying to find the optimal point of censorship that will satisfy both Maza and Crowder but this is, of course, impossible. Censorship, by definition, involves the imposition of a set of rules and values on other people who may not agree with them. When you also find yourself in the middle of a culture war it’s probably impossible to please anyone, let alone everyone.

One of the challenges of using nebulous neologisms like ‘hate speech’ is that they’re very difficult to define. YouTube attempted to do so in its first post by talking about discrimination against people on the basis of a number of characteristics. Unstated, but always implicit, in such policies is that enforcement is usually one directional – i.e. not all characteristics are subject to protection from ‘hate speech’ – which often leads to claims of bias against those not protected.

More broadly, as soon as a censor acts against a type of speech it then comes under pressure to apply that sanction to each and every other instance of that type under its jurisdiction even-handedly. If it doesn’t then it’s reasonable to conclude there is some bias built into the process, which will displease those who consider themselves adversely affected by it.

Another major issue social media censorship raises is the status of services like YouTube, Facebook and Twitter. They are currently legally positioned at ‘platforms’ which means they’re not responsible for the content they host. As they increasingly act in an editorial capacity, however, there is a good argument that they should be reclassified as publishers, which would fundamentally undermine their whole model.

As we wrote yesterday, those calling for censorship should be careful what they wish for since it could one day be applied to them. Maza wants Crowder to be censored for harassing him, but himself recently called for the harassment of people whose politics he disapproves of. Under these new rules should he not be punished too?

We will leave you, appropriately enough, with a couple of YouTube clips. The first features Crowder discussing the matter with independent journalist Tim Pool, who is sympathetic to him but is more interested in exploring some of the broader issues this case highlights. The second is an excerpt from a recent podcast published by Joe Rogan, in which he and leftist commentator David Pakman wrestle with the complexities of the matter. Both illustrate the impossible position YouTube has put itself in by acting as a censor.

 

Four Chinese operators are awarded 5G licences

All the four incumbent telecom operators in China received commercial 5G licences, raising the curtain on the commercial rollout of the next generation mobile networks in the world’s biggest telecom market.

The Ministry of Industry and Information Technology, both the government policy making body and the telecom regulator in China, announced earlier this week that 5G licences would be awarded soon. It turned out the market did not need to wait for too long. On Thursday, 6 June 2019, all the four state-owned telecom operators were awarded 5G commercial licences. These include China Mobile, the world’s biggest mobile operator by subscriber numbers, China Telecom, the world’s largest integrated telecom operator by subscriber numbers, China Broadcasting Network Corporation Ltd, the state broadcaster which was awarded a basic telecom service licence in 2016, and China Unicom.

Three of them (except for Broadcasting Network) received 5G trial licences at the end of 2018. Trials by China Telecom and China Unicom were conducted on the 3.5GHz band, while China Mobile conducted its trials on the 2.6GHz and 4.9GHz bands. The consensus at that time was China would not roll out commercial 5G services until 2020 when all the major standalone (SA) mode standards are frozen. The latest move looks to be pushing the schedule forward.

Earlier this year, China Telecom announced that it had live trialled out 5G in 17 cities. China Unicom announced that it would extensively cover seven cities with 5G and cover the hotspots in 33 more cities. China Mobile also pledged to cover 40 cities with 5G. China Unicom has also certified six 5G smartphones and five industrial terminals.

The Minister for Industry and Information Technology spoke at the ceremony that China “will continue to welcome overseas enterprises to participate in the rollout of China’s 5G networks”. But the largest beneficiaries are expected to be China’s leading equipment vendors Huawei and ZTE, both of which quickly pledged their full support to the Chinese operators with their “end-to-end 5G capabilities”.

Nokia and Ericsson, both with sizeable footprints in China’s 3G and 4G networks, may carry the investors’ expectations to maximise their shares in the Chinese market, but may feel the heat of the ongoing trade war between the US and China and the exclusion of Huawei from 5G in a number of western markets. On the other hand, if the sanction is not lifted fast enough, despite the claim that it has built a stockpile of components, Huawei may soon find it difficult to supply the equipment needed by the Chinese operators.