Facebook moves into global banking

This morning’s Observer column:

We’ve known for ages that somewhere in the bowels of Facebook people were beavering away designing a cryptocurrency. Various names were bandied about, including GlobalCoin and Facebook Coin. The latter led some people to conclude that it must be a joke. I mean to say, who would trust Facebook, of Cambridge Analytica fame, with their money?

Now it turns out that the rumours were true. Last week, Facebook unveiled its crypto plans in a white paper. It’s called Libra and it is a cryptocurrency, that is to say, “a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets”.

Like bitcoin, then? Er, not exactly…

Read on

LATER Merryn Somerset Webb of the Financial Times had a really good column ($) about the Facebook venture. Among the points she raises are:

  • Real cryptocurrencies are about privacy and freedom. They are decentralised and permissionless — no one runs them, no one can be prevented from using them and the system never needs reference to a central authority. (This last assertion is dubious — see Vili Lehdonvirta’s Turing Institute talk — but we will leave that pass for now.) Libra is to be none of these wonderful things. It is to be run by a single organisation based in Switzerland. It is centralised and permissioned — and its value will not depend on anything intrinsic to it but to a basket of fiat currencies.

  • The interest from the deposits and government bonds that back Libra will not go to the people holding the currency. It will be used to pay for the system’s operating costs and, once those are covered, to the founding members as dividends.

  • There are real privacy concerns raised by Libra, especially in relation to Facebook’s role in it in relation to the metadata that Libra will throw up. “If you are worried about the way financial apps might use data on your spending patterns, you should be really worried about how a vast social network morphing into a financial network might use it. Anyone with your social media data can guess what you might buy. Anyone with your financial data knows already.”

  • If Libra really is based on a basket of fiat currenties and is stable as a result, it might not take long for us to refer to the value of things in Libras. A Libra could just be a Libra. That, says Webb, “is a sovereignty game-changer”.

  • If Libra succeeds, it won’t because it’s a real cryptocurrency. It’ll be because it isn’t.

In the West, Facebook is becoming an older person’s network

This is interesting.

All the bad press about Facebook might be catching up to the company. New numbers from Edison Research show an an estimated 15 million fewer users in the United States compared to 2017. The biggest drop is in the very desirable 12- to 34-year-old group. Marketplace Tech got a first look at Edison’s latest social media research. It revealed almost 80 percent of people in the U.S. are posting, tweeting or snapping, but fewer are going to Facebook.

Fakebook

Great NYT column by Kara Swisher:

So, Fakebook it is.

This week, unlike YouTube, Facebook decided to keep up a video deliberately and maliciously doctored to make it appear as if Speaker Nancy Pelosi was drunk or perhaps crazy. She was not. She was instead the victim of an obvious dirty trick by a dubious outfit with a Facebook page called Politics WatchDog.

The social media giant deemed the video a hoax and demoted its distribution, but the half-measure clearly didn’t work. The video ran wild across the system.

Facebook’s product policy and counterterrorism executive, Monika Bickert, drew the short straw and had to try to come up with a cogent justification for why Facebook was helping spew ugly political propaganda.

“We think it’s important for people to make their own informed choice for what to believe,” she said in an interview with CNN’s Anderson Cooper. “Our job is to make sure we are getting them accurate information.”

So was this faked video “accurate information”, then? Of course not. Or, as Swisher continues,

Would a broadcast network air this? Never. Would a newspaper publish it? Not without serious repercussions. Would a marketing campaign like this ever pass muster? False advertising.

No other media could get away with spreading anything like this because they lack the immunity protection that Facebook and other tech companies enjoy under Section 230 of the Communications Decency Act. Section 230 was intended to spur innovation and encourage start-ups. Now it’s a shield to protect behemoths from any sensible rules.

In the end, we will have to get back to the Section 230 exemption.

Finally, a government takes on the tech companies

This morning’s Observer column:

On Monday last week, the government published its long-awaited white paper on online harms. It was launched at the British Library by the two cabinet ministers responsible for it – Jeremy Wright of the Department for Digital, Culture, Media and Sport (DCMS) and the home secretary, Sajid Javid. Wright was calm, modest and workmanlike in his introduction. Javid was, well, more macho. The social media companies had had their chances to put their houses in order. “They failed,” he declared. “I won’t let them fail again.” One couldn’t help feeling that he had one eye on the forthcoming hustings for the Tory leadership.

Nevertheless, this white paper is a significant document…

Read on

Zuckerberg’s latest ‘vision’

This morning’s Observer column:

Dearly beloved, our reading this morning is taken from the latest Epistle of St Mark to the schmucks – as members of his 2.3 billion-strong Church of Facebook are known. The purpose of the epistle is to outline a new “vision” that St Mark has for the future of privacy, a subject that is very close to his wallet – which is understandable, given that he has acquired an unconscionable fortune from undermining it.

“As I think about the future of the internet,” he writes (revealingly conflating his church with the infrastructure on which it runs), “I believe a privacy-focused communications platform will become even more important than today’s open platforms. Privacy gives people the freedom to be themselves and connect more naturally, which is why we build social networks.”

Quite so…

Read on

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.