Category Archives: Facebook

Facebook: the regulatory noose tightens

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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?

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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

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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…

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

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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

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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…

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Shoshana Zuboff’s new book

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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.

Why Facebook isn’t viable in its current form

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This morning’s Observer column:

Way back in the 1950s, a pioneering British cybernetician, W Ross Ashby, proposed a fundamental law of dynamic systems. In his book An Introduction to Cybernetics, he formulated his law of requisite variety, which defines “the minimum number of states necessary for a controller to control a system of a given number of states”. In plain English, it boils down to this: for a system to be viable, it has to be able to absorb or cope with the complexity of its environment. And there are basically only two ways of achieving viability in those terms: either the system manages to control (or reduce) the variety of its environment, or it has to increase its internal capacity (its “variety”) to match what is being thrown at it from the environment.

Sounds abstruse, I know, but it has a contemporary resonance. Specifically, it provides a way of understanding some of the current internal turmoil in Facebook as it grapples with the problem of keeping unacceptable, hateful or psychotic content off its platform…

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See also Tyler Cowen’s ‘trilemma’ piece

Facebook: (yet) another scandalous revelation

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If you’re a cynic about corporate power and (lack of) responsibility — as I am — then Facebook is the gift that keeps on giving. Consider this from the NYT this morning:

For years, Facebook gave some of the world’s largest technology companies more intrusive access to users’ personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews.

The special arrangements are detailed in hundreds of pages of Facebook documents obtained by The New York Times. The records, generated in 2017 by the company’s internal system for tracking partnerships, provide the most complete picture yet of the social network’s data-sharing practices. They also underscore how personal data has become the most prized commodity of the digital age, traded on a vast scale by some of the most powerful companies in Silicon Valley and beyond.

The deals described in the documents benefited more than 150 companies — most of them tech businesses, including online retailers and entertainment sites, but also automakers and media organizations, and include Amazon, Microsoft and Yahoo. Their applications, according to the documents, sought the data of hundreds of millions of people a month, the records show. The deals, the oldest of which date to 2010, were all active in 2017. Some were still in effect this year.

Is there such a condition as scandal fatigue? If there is, then I’m beginning to suffer from it.

Obstructionism: Google and Facebook style

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The Register has a rather good report of the two investigations carried out for the Senate Intelligence Committee — and it highlights something that other reports seem to have missed — how the social media giants did their best to be, er, unhelpful.

The second Senate-commissioned report, written by Oxford University’s Internet Institute, reached the same conclusion: that the Russian campaign was large, sophisticated, and focused on Donald Trump’s election as president.

Thanks, no thanks

In this report, however, researchers also take time to criticize the response of the social networking giants to their efforts to understand what had happened: the internet titans were extremely unhelpful, even after being publicly chastised in the press and in Congress.

The worst offender may have been Google, which supplied very little information and when it did, supplied in it hard-to-search PDFs, making it difficult and time-consuming to analyze. Facebook was no better: simply refusing to hand over information and limiting what it did send to English-language pages. Even the most responsive company – Twitter – only sent the researchers shortlinks, as opposed to full URLs, making it harder to use other tools to track their impact and links across the internet.

The New Knowledge report says the same, noting that the companies also appear to have stripped meta data from the information they sent i.e. they actively tried to disrupt efforts to understand the reach and impact of Russian propaganda efforts.

In short, the two reports tell us what we already knew: that there was a large, organized Russian campaign in favor of Donald Trump; that the campaign used divisive social issues to attract people’s attention and push its messages; and the tech companies were caught completely unawares and then responded incredibly defensively when the size and scope of the propaganda campaign was revealed.

The difference from previous dossiers is that these reports are comprehensive and detailed. And they clearly identify the strategies and targets where previously much of the detail was anecdotal or intelligent conjecture. And, of course, we learned that Instagram punches above its weight, and the Russian campaign was so well resourced that it even bothered to post on Google+.