So Facebook does exercise editorial control after all

Senator Elizabeth Warren is running for President — or at any rate for the Democratic nomination. One of her policy proposals is to break up the tech giants. Like all other presidential hopefuls, her campaign advertises on Facebook. The ads included a video which pointed users to a petition on Warren’s campaign website urging them “to support our plan to break up these big tech companies.” “Three companies have vast power over our economy and our democracy”, said one ad that Warren’s campaign had placed on Friday. “Facebook, Amazon, and Google. We all use them. But in their rise to power, they’ve bulldozed competition, used our private information for profit, and tilted the playing field in their favor.”

Guess what happened next? Facebook removed the ads on the grounds that they violated the company’s terms and conditions for advertisers. Politico reported the takedown, after which Facebook hurriedly restored the ads. “We removed the ads because they violated our policies against use of our corporate logo,” explained a spokesperson. “In the interest of allowing robust debate, we are restoring the ads.”

Warren then tweeted

“Curious why I think FB has too much power? Let’s start with their ability to shut down a debate over whether FB has too much power,” she tweeted. “Thanks for restoring my posts. But I want a social media marketplace that isn’t dominated by a single censor.”

Quote of the Day

Q: We’re now more than two years out from that experience, and obviously the controversies have not gone away — they’ve actually multiplied. Do you think Zuckerberg and Sandberg have made any progress on the stuff you warned about?

A: I want to avoid absolutes, but I think it’s safe to say that the business model is the source of the problem, and that it’s the same business model as before. And to the extent that they made progress, it’s in going after different moles in the Whack-a-Mole game. From the point of view of the audience, Facebook is as threatening as ever.

From an interview with Roger McNamee, an early investor in Facebook and apparently a recovering former mentor to Mark Zuckerberg. He’s also the author of Zucked: Waking Up to the Facebook Catastrophe.

Facebook’s vassal state

Since the late 1950s, my native land’s grand strategy — initially for survival and later for prosperity — was to be welcoming to foreign multinational companies. For half a century, that strategy worked well. But now it’s become problematic. Why? Because some of the giant multinationals which have made Ireland their European bases have become toxic.

Chief among these is Facebook, the leading data-vampire. Until the other day, we had our suspicions about the subservience of the Irish government to the wishes and requirements of the Zuckerberg empire. Now — thanks to two remarkable pieces of reporting — we have some evidence of the cosy relationship that developed between Facebook’s second-in-command, Sheryl Sandberg (the ‘Typhoid Mary’ of surveillance capitalism, as Shoshana Zuboff describes her) and the previous Irish Taoiseach (Prime Minister), Enda Kenny.

The first breakthrough came from my Observer colleagues Carole Cadwalladr and Duncan Campbell and was based on a leaked internal Facebook document which described, among other things, Facebook’s

“great relationship” with Enda Kenny, the Irish prime minister at the time, one of a number of people it describes as “friends of Facebook”. Ireland plays a key role in regulating technology companies in Europe because its data protection commissioner acts for all 28 member states. The memo has inflamed data protection advocates, who have long complained about the company’s “cosy” relationship with the Irish government.

The document also noted

Kenny’s “appreciation” for Facebook’s decision to locate its headquarters in Dublin and points out that the new proposed data protection legislation was a “threat to jobs, innovation and economic growth in Europe”. It then goes on to say that Ireland is poised to take on the presidency of the EU and therefore has the “opportunity to influence the European Data Directive decisions”. It makes the extraordinary claim that Kenny offered to use the “significant influence” of the EU presidency as a means of influencing other EU member states “even though technically Ireland is supposed to remain neutral in this role”.

The second revelation comes from a terrific investigation by the Irish Independent newspaper. This tells how, two days after the meeting the Taoiseach in Davos (where else?), Sandberg wrote to Kenny, warning him how changes to taxation or privacy laws might lead Facebook to consider ‘different options for future investment and growth in Europe’.

Her email reads:

“I also want to commend you once again for your leadership during your Presidency of the EU. You made enormous progress. When it came to the European Data Protection Regulation, you and your staff really internalised our concerns and were able to present them in a reasonable way, which has had a positive impact …We hope we can rely on you for your continued leadership on this regulation since we still have more work to do here. Along the same lines, I was pleased to hear that you are so involved in the OECD working group process on tax reform. These discussions will be very complicated and important, and we hope to be helpful to you identifying the implications with different options for future investment and growth in Europe. We are keen to collaborate with your office on this, just as we have on the DPR.”

Following the meeting in Davos, Facebook’s Senior Policy team, comprising 15 executives from Washington, California, Dublin, and across Europe, requested a personal meeting with the Taoiseach in Government Buildings, Dublin on February 6 2014.

Kenny did not meet the delegation but instead sent his special adviser, Paul O’Brien, the Secretary General to the Government, Martin Fraser, and two of the Taoiseach’s experienced assistant secretaries with responsibility for international economic matters, Lorcan Fullam and John Callinan.

But then Kenny was given the treatment that generally suborns impressionable technically-illiterate politicians: an invitation to Facebook’s headquarters in Menlo Park, California, in June 2014, where he was granted a 43-minute audience with Sandberg.

According to the Independent report, the mogul and her awestruck visitor discussed the need for one tax regulator in the EU, and also the issue of who would replace Billy Hawkes as the Irish Data Protection Commissioner (who was due to retire on August 31 that year). And a follow-up letter to the Taoiseach in June 2014 specifically mentions Billy Hawkes and the need for his replacement to be “a strong candidate”.

“While Mr Hawkes’s independence and integrity are undisputed”, says the Independent — with an attentive eye to legal niceties — “there is no doubt that Facebook would have been relieved in 2013, when Mr Hawkes refused to investigate claims that Facebook Ireland had transferred data to the States for examination by the NSA”.

Background: Hawkes had refused the investigation on the legal grounds that Facebook was entitled to send data from the EU to the US under EU Commission Safe Harbour provisions. Interestingly, though, when Sandberg was being granted personal access to the Taoiseach, a judicial review of Hawkes’s decision had been initiated in the Irish High Court. And of course, in the end, the European Court ruled that the ‘Safe Harbour’ agreement was invalid.

These are extraordinary revelations, though I suspect they will surprise nobody familiar with the servile cringe that Irish politicians habitually adopt when dealing with their corporate ‘guests’. Note particularly, the tone and content of the leaked emails. For example:

  • Referring to the tricky challenge (for Facebook) of European Data Protection Regulation, you and your staff internalised our concerns and were able to present them in a reasonable way, which has had a positive impact. …We hope we can rely on you for your continued leadership on this regulation since we still have more work to do here.

  • And, on tax reform, I was pleased to hear that you are so involved in the OECD working group process on tax reform.

Emphasis added. Pass the sickbag, Alice.

Facebook’s targeting engine: still running smoothly on all cylinders

Well, well. Months — years — after the various experiments with Facebook’s targeting engine showing hos good it was at recommending unsavoury audiences, this latest report by the Los Angeles Times shows that it’s lost none of its imaginative acuity.

Despite promises of greater oversight following past advertising scandals, a Times review shows that Facebook has continued to allow advertisers to target hundreds of thousands of users the social media firm believes are curious about topics such as “Joseph Goebbels,” “Josef Mengele,” “Heinrich Himmler,” the neo-nazi punk band Skrewdriver and Benito Mussolini’s long-defunct National Fascist Party.

Experts say that this practice runs counter to the company’s stated principles and can help fuel radicalization online.

“What you’re describing, where a clear hateful idea or narrative can be amplified to reach more people, is exactly what they said they don’t want to do and what they need to be held accountable for,” said Oren Segal, director of the Anti-Defamation League’s center on extremism.

Note also, that the formulaic Facebook response hasn’t changed either:

After being contacted by The Times, Facebook said that it would remove many of the audience groupings from its ad platform.

“Most of these targeting options are against our policies and should have been caught and removed sooner,” said Facebook spokesman Joe Osborne. “While we have an ongoing review of our targeting options, we clearly need to do more, so we’re taking a broader look at our policies and detection methods.”

Ah, yes. That ‘broader look’ again.

Facebook: the regulatory noose tightens

This is a big day. The DCMS Select Committee has published its scarifying report into Facebook’s sociopathic exploitation of its users’ data and its cavalier attitude towards both legislators and the law. As I write, it is reportedly negotiating with the Federal Trade Commission (FTC) — the US regulator — on the multi-billion-dollar fine the agency is likely to levy on the company for breaking its 2011 Consent Decree.

Couldn’t happen to nastier people.

In the meantime, for those who don’t have the time to read the 110-page DCMS report, Techcrunch has a rather impressive and helpful summary — provided you don’t mind the rather oppressive GDPR spiel that accompanies it.

What makes a ‘tech’ company?

The Blackrock Blog points out that something strange is going on in the investment world.

MSCI and S&P are updating their Global Industry Classification Standards (GICS), a framework developed in 1999, to reflect major changes to the global economy and capital markets, particularly in technology.

Take Google, a company long synonymous with “tech” and internet software. Google parent Alphabet derives the bulk of its revenue from advertising, but also makes money from apps and hardware, and operates side ventures including Waymo, a unit that makes self-driving cars. Decisions about what makes a “tech” giant are not as simple as they once were.

The sector classification overhaul, set in motion last year, will begin in September and affect three of the 11 sector classifications that divide the global stock market. A newly created Communications Services sector will replace a grouping that is currently called Telecommunications Services. The new group will be populated by legacy Telecom stocks, as well as certain stocks from the Information Technology and Consumer Discretionary categories.

What does this mean?

Facebook and Alphabet will move from Information Technology to Communications Services in GICS-tracking indexes. Meanwhile, Netflix will move from Consumer Discretionary to Communications Services. None of what the media has dubbed the FANG stocks (Facebook, Amazon.com, Netflix and Google parent Alphabet) will be classified as Information Technology after the GICS changes, perhaps a surprise to those who think of internet innovation as “tech.” The same applies to China’s BAT stocks (Baidu, Alibaba Group and Tencent). All of these were Information Technology stocks before the changes; none will be after.

Or, in a tabular view:

This change is probably only significant for index funds, but still, it must rather dent the self-image of the ‘tech’ boys to be categorised as merely “communications services”!

Why, sooner or later, societies are going to have to rein in the tech giants

My OpEd piece in yesterday’s Observer:

Spool forward to the tragic case of Molly Russell, the 14-year-old who killed herself after exploring her depression on Instagram. When her family looked into her account, they found sombre material about depression and suicide. Her father said that he believed the Facebook-owned platform had “helped kill my daughter”. This prompted Matt Hancock, the health secretary, to warn social media platforms to “purge” material relating to self-harm and suicide or face legislation that would compel them to do so. In response, Instagram and Pinterest (another social media outfit) issued the standard bromides about how they were embarking on a “full review” of their policies etc.

So is Molly’s case a crisis or a scandal? You know the answer. Nothing much will change because the business models of the platforms preclude it. Their commercial imperatives are remorselessly to increase both the number of their users and the intensity of those users’ “engagement” with the platforms. That’s what keeps the monetisable data flowing. Tragedies such as Molly Russell’s suicide are regrettable (and of course have PR downsides) but are really just the cost of running such a profitable business.

Asking these companies to change their business model, therefore, is akin to “asking a giraffe to shorten its neck”, as Shoshana Zuboff puts it in her fiery new book, The Age of Surveillance Capitalism…

Read on

“No real-world harm” says Facebook. Really?

SAN FRANCISCO (CN) – A federal judge on Friday rejected Facebook’s argument that it cannot be sued for letting third parties, such as Cambridge Analytica, access users’ private data because no “real world” harm has resulted from the conduct.

“The injury is the disclosure of private information,” U.S. District Judge Vince Chhabria declared during a marathon four-and-a-half-hour motion-to-dismiss hearing Friday.

Facebook urged Chhabria to toss out a 267-page consolidated complaint filed in a multidistrict case seeking billions of dollars in damages for Facebook’s alleged violations of 50 state and federal laws.

There’s a class-action suit coming triggered by the Cambridge-Analytica scandal.

WhatsApp tries damage limitation

This morning’s Observer column:

In the last two years, around two dozen people in India have been killed by lynch mobs inflamed by rumours on WhatsApp, the encrypted messaging service owned by Facebook. WhatsApp has also been fingered for its role in other hateful or unsavoury episodes in Brazil and Pakistan. In each case, the accusation is essentially the same: disinformation and lies, often of an inflammatory kind, are effortlessly disseminated by WhatsApp and obviously believed by some of the recipients, who are thereby encouraged to do terrible things.

In terms of software architecture and interface design, WhatsApp is a lovely system, which is why it is a favourite of families, not to mention Westminster plotters, who are allegedly addicted to it. Its USP is that messages on the platform are encrypted end to end, which means that not even Facebook, the app’s owner, can read them. This is either a feature or a bug, depending on your point of view. If you’re a user, then it’s a feature because it guarantees that your deathless prose is impenetrable to snoopers; if you’re a spook or a cop, then it’s definitely a bug, because you can’t read the damned messages.

A few years ago, WhatsApp added a key new feature – an easy way to forward a message to multiple chat groups at once…

Read on

Shoshana Zuboff’s new book

Today’s Observer carries a five-page feature about Shoshana Zuboff’s The Age of Surveillance Capitalism consisting of an intro by me followed by Q&A between me and the author.

LATER Nick Carr has a perceptive review of the book in the LA Review of Books. John Thornhill also had a good long review in last Saturday’s Financial Times, sadly behind a paywall.