Category Archives: Regulation

Tuesday 7 July, 2020

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Meet the enemy

From Nature.

Monochromatic vision

Once upon a time every photograph I took was in black and white. Colour film was just too expensive. But as an experiment during lockdown, I decided to go back to monochrome — and was reminded that B&W photography is a completely different art form. Colour is easier — much easier.

Here’s one picture from yesterday’s foray.

Click on the image to see a larger size.

Trump, Twitter, Facebook and the future of online speech

Terrific, wide-ranging, historically-informed New Yorker essay by Anna Wiener on Section 230 and related matters.

Still, there’s a reason the order focussed on Section 230. The law is considered foundational to Silicon Valley. In “The Twenty-Six Words That Created the Internet,” a “biography” of the legislation, Jeff Kosseff, a professor of cybersecurity law at the U.S. Naval Academy, writes that “it is impossible to divorce the success of the U.S. technology sector from the significant benefits of Section 230.” Meanwhile, despite being an exceptionally short piece of text, the law has been a source of debate and confusion for nearly twenty-five years. Since the 2016 Presidential election, as awareness of Silicon Valley’s largely unregulated power has grown, it has come under intensified scrutiny and attack from both major political parties. “All the people in power have fallen out of love with Section 230,” Goldman told me, in a phone call. “I think Section 230 is doomed.” The law is a point of vulnerability for an industry that appears invulnerable. If it changes, the Internet does, too.

Great piece. Well worth reading in full if you’re interested in Internet regulation.

It’s mourning in America

The Lincoln Project is a political movement by Republicans who oppose Trump and are trying to persuade fellow-Republicans to drop him. They’re putting together some hard-hitting TV campaign ads. This is the one I like best, because it deliberately echoes Ronald Reagan’s famous “Morning in America” slogan.

Link

A future shaped by the coronavirus

Quartz asked dozens of experts for their best predictions on how the world will be different in five years.

Here’s Hany Farid’s answer. He’s a professor at the University of California, Berkeley with appointments in both Electrical Engineering & Computer Science and the School of Information. He specializes in the analysis of digital images, particularly deepfakes.

In five years, I expect us to have long since reached the boiling point that leads to reining in an almost entirely unregulated technology sector to contend with how technology has been weaponized against individuals, society, and democracy. Social media in particular has become the primary source of news for more than half of people around the world. At the same time, social media is littered with hate, divisiveness, misinformation, and illegal activity. The global Covid-19 pandemic has highlighted the breadth and depth of these issues as people around the world are spending more time online alongside deadly misinformation, outrageous conspiracies, and small- to large-scale fraud. The reckoning that is sure to come will change the way we view and interact with the technology we have grown more and more reliant on in our lives.

Yep.

Tim Berners-Lee is optimistic, as ever. He chose to imagine looking back from 2025:

It’s 2025 and now the world is working again. You want me to compare my life now with 2020? Well, 2020 was ghastly in so many ways. The pandemic was awful, and the way the world worked was so dysfunctional.

Today it’s quite different. I feel that I am part of functional communities and societies at different levels, and I feel that within those groups, I am part of the solutions we are finding to the problems. I have sources of news and information that I trust, and I play a part in making them trustworthy. Importantly, I feel that most other people in the world, while they have different priorities and different ideas of how the economy should run, are working off the same facts, the same science.

Thinking about my life—be it day-to-day family life, my work, my music, my play, my volunteering with organizations—it’s all, in fact, data. It is data I control. It all connects together. What I love now is how everything is online as data: I feel powerful. I can see things from all of my life together. I can share anything with anyone. People share all kinds of things with me. When I decide what to do on Friday, I see in my calendar all the things happening in each of the segments of my life all brought together. How else would I function? When I wonder about doing something, I see its cost in dollars, in time, and in carbon, whether it is at home or at work, and I feel I can make decisions with a sort of integrity I didn’t have in 2020.

I’m proud of the world managing to make communal decisions after the crisis of 2020. I’m proud we stopped using paper. I’m proud of the oil we left in the ground. I’m proud of the privacy we have given back to people who opened up their health, medical, and genetic data in the pandemics of 2020 and 2022. I’m happy that people are in control of that data and were in a position to offer it up. I am proud of the people I know who worked to make all the apps I use talk the same language. We take it for granted now that you and I can use entirely different apps or tools for looking, sharing, and managing data—no matter whether that’s for photos, banking info, or other projects. It wasn’t always like that!

We call that interoperability or interop. I teach my kids about interop. The interop movement was born out of a project from MIT called Solid, a company called Inrupt, and an open-source community. Together, they set about updating the web of 2020 by flipping the rules of who gets value from data. It was a lot of hard work to get here.

My digital life is my world; it is my identity. I use all kinds of devices to live my digital life, of course. I think of them as different windows into the same world. But it’s not about the devices. It’s not about the apps. It’s the huge benefit of linking all the data—not just my data, but also the data shared with me, connected device data, and all the publicly available data—all in one world. That’s the essence of my life and the main change for me since 2020, I think. Since you asked.

Like I said, ever the optimist.

If you’re over 75, getting Covid is like playing Russian roulette

Interesting piece by Antonio Regalado,the Biomedicine Editor of MIT’s Tech Review:

By now you might be wondering what your own death risk is. Online, you can find apps that will calculate it, like one at covid19survivalcalculator.com, which employs odds ratios from the World Health Organization. I gave it my age, gender, body mass index, and underlying conditions and learned that my overall death risk was a bit higher than the average. But the site also wanted to account for my chance of getting infected in the first place. After I told it I was social distancing and mostly wearing a mask, and my rural zip code, the gadget thought I had only a 5% of getting infected.

I clicked, the page paused, and the final answer appeared: “Survival Probability: 99.975%”.

Those are odds I can live with. And that’s why I am not leaving the house.

Moral: Keep your distance, stay at home as much as you can and wear a mask. It’s not rocket science.

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Saturday 27 June, 2020

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Quote of the Day

Other countries are used to loathing America, admiring America, and fearing America (sometimes all at once). But pitying America? That one is new.

The dead tree

On one of our cycle routes. Dead trees make for very dramatic photographs, sometimes. I’m always tempted to stop and photograph them.

Can this really be right?

From today’s Guardian:

The UK government’s plan to invest hundreds of millions of pounds in a satellite broadband company has been described as “nonsensical” by experts, who say the company doesn’t even make the right type of satellite the country needs after Brexit.

The investment in OneWeb, first reported on Thursday night, is intended to mitigate against the UK losing access to the EU’s Galileo satellite navigation system.

But OneWeb – in which the UK will own a 20% stake following the investment – currently operates a completely different type of satellite network from that typically used to run such navigation systems.

“The fundamental starting point is, yes, we’ve bought the wrong satellites,” said Dr Bleddyn Bowen, a space policy expert at the University of Leicester. “OneWeb is working on basically the same idea as Elon Musk’s Starlink: a mega-constellation of satellites in low Earth orbit, which are used to connect people on the ground to the internet.

“What’s happened is that the very talented lobbyists at OneWeb have convinced the government that we can completely redesign some of the satellites to piggyback a navigation payload on it. It’s bolting an unproven technology on to a mega-constellation that’s designed to do something else. It’s a tech and business gamble.”

If true, it looks like Trump-level imbecility.

Simon Kuper on why football matters

Lovely essay:

I’m British but I grew up mostly abroad, so when I went to university in England I discovered a new species of man: the Total Fan, the teenager whose main identity was the football club he supported. I witnessed conversations in the common room that went like this:

Student in plastic Manchester United shirt: “We’re brilliant this season.”

Student in Spurs shirt: “No, you’re shit.”

Student in Crystal Palace shirt: “He’s right, Steve. You’re shit.”

They weren’t exactly casting aspersions on Steve’s personality. They were talking about his football club. However, they saw the two things as essentially the same. Steve was Manchester United. The Spurs fan once told me that, when his team won the FA Cup, he walked into the common room to receive everybody’s congratulations as if he personally had lifted the trophy.

Even if you’re not a football fan (and I’m not) this is worth reading.

Share the wealth as we recover health (hopefully)

Noema magazine (a new publication from the Berggruen Institute) has an interesting conversation with Joe Stieglitz and Ray Dalio about how to ensure that the benefits of any recovery from the Covid crisis are shared with the population as a whole.

The basic idea: the massive taxpayer-financed cash infusion to save some of the largest companies that are otherwise viable may present a unique opportunity to more effectively tackle inequality by bolstering the assets of the less well-off. If the same taxpayers who are bearing the costs of the bailout also share an upside when we recover prosperity, wealth will be shared more fairly.

“This can be done”, says the magazine,

by establishing a sovereign wealth fund, or national endowment, that pools the taxpayer’s ownership shares from all the bailed-out companies and distributes regular dividends to all citizens. We call this “universal basic capital,” as distinct from the idea of a universal basic income. Instead of only once again relying on redistributing income to close the gap after wealth has been created, that wealth should be shared upfront in what we call “pre-distribution.”

There are many models out there that guide us on this path. Alaska has long had a social wealth fund that pays dividends to citizens from the revenues of the state’s oil leases. Norway has a similar fund, also from oil revenues, that pays into the general pension system. Australia has what is calls the superannuation fund, in essence a sovereign wealth fund financed by employees, employers and state contributions for its universal pension scheme. The wealth of that fund now stands at almost $2 trillion, a sum greater than Australia’s GDP. Singapore has a similar plan, called the Central Provident Fund, from which citizens can also draw for health and housing needs. It is so profitable from its global investments that it is even able to fund some government services and help keep taxes low.

What is important at this point is to recognize the opportunity for reducing social inequality that can be created by a fair and innovative approach to economic recovery. If everyone in this pandemic must share the downside, all must share in the upside as well.

Some promising ideas here. And the good thing is that none of the corporations in which governments might take a stake in return for support during the pandemic are tech companies, for the simple reason that those companies are the ones that will have benefited most from the crisis.

Noema‘s good, btw.

We can make you hurt if you don’t do what we want

Jonathan Zittrain is my idea of a perfect academic. Staggeringly bright, knows both digital tech and the law intimately (he has Chairs in both Harvard Law and Engineering), fizzes with original and often productive ways of viewing tricky problems, etc. So whenever he writes or lectures about anything I pay attention.

Now he has an article in The Atlantic about what social media outfits should do about Trump. At the beginning, his discussion of the possible options for regulating the speech of an authoritarian nutter takes a fairly standard detached, scholarly tone. His emerging conclusion seems to be that every plausible configuration of social media in 2020 is unpalatable.

But then, he briefly switches to a different register:

Those proposals can be analyzed and judged on their own terms as if they simply appeared on Congress’s docket out of nowhere, and I’d normally offer here some thoughts on their details. But I can’t stay in my academic lane. The executive order, and the push for more legislation, is part of a larger pattern in which the president appears to seek vengeance against those who even mildly criticize him, retaliating in any way he can, including by using the powers of his office. When, for instance, he didn’t like The Washington Post’s reporting about him, he made it clear—on Twitter, fittingly enough—that, because the paper is owned by Amazon CEO Jeff Bezos, he would like to disadvantage Amazon however he can, including by demanding that the U.S. Postal Service raise its shipping rates. Here, the executive order is so scattershot, and the legislation so crudely sweeping, that it’s important to recognize that it conveys more than its text says. What it really says is: We can make you hurt unless you do what we want, and what we want is what helps the president personally. [Emphasis added.]

Yep: full marks. That’s the nub of Trump’s authoritarian threat. Same as Erdogan, Orban, Bolsonaro & Co.

So what does Zittrain think we should do?

“In the near term, the simplest solution is to vote Trump out of office.”

Well, yes: but you don’t have to be a bi-Chaired Harvard prof to come to that conclusion.

What if that option doesn’t work?

“In the longer term”, says Zittrain,

the most promising path for online content moderation lies in taking up unavoidable decisions by the largest companies in ways that respect the gravity of those decisions — likely involving outside parties in structured, visible roles — and, even more important, in decentralizing the flows of information online so that no one company can readily change the map.

So when Twitter tempers its deference and wades into a fraught zone by fact-checking in its own voice, still judged in the public sphere by its attention to the real facts, I respect its decision. One way to try to break what is raging behavior even—and especially—by a president is to create policies to deal with it, policies that would collect dust if the rule of law and the institutions designed to reinforce it were not under such extraordinary and explicit attack.

Yeah, sure. But this seems a bit feeble after the build-up. What might those policies look like? And how might we ‘decentralize’ those information flows?

Maybe there’s a sequel to this piece coming. If so I can’t wait.

Quarantine diary — Day 98

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Wednesday 24 June, 2020

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Facebook runs into a German wall

From the FT — probably paywalled.

Facebook suffered a setback in Germany on Tuesday after the country’s highest civil court ruled that it must comply with an order from the German antitrust watchdog and fundamentally change the way it handles users’ data.

The ruling by the federal court of justice in Karlsruhe takes aim at the way Facebook merges data from the group’s own services, such as WhatsApp and Instagram, with other data collected on third-party internet sites via its business tools.

In 2019, Germany’s cartel office blocked Facebook from pooling such data without user consent. Facebook later won a suspension of that decision from a court in Düsseldorf and wanted the pause to continue until a ruling on its appeal.

But on Tuesday the Karlsruhe court set aside the Düsseldorf ruling and backed the antitrust authorities, saying Facebook in future had to offer its users a choice when it collects and merges data from websites outside of its own ecosystem.

Interesting. Andreas Mundt, head of the German cartel office, is a determined and imaginative official. In a statement, he welcomed the decision. He said data was a decisive factor for economic power and for judging market power on the internet. “Today’s ruling gives us important clues as to how we should deal with the issues of data and competition,” he said, in comments quoted by DPA agency.

Progress, at last.

Mark Zuckerberg Believes Only in Mark Zuckerberg

Why is he abetting Trump while civil rights leaders and his own employees rebuke him? It’s about dominance.

At last, people are beginning to suss what it is about Zuckerberg that’s so weird. I’ve thought for years — on the basis of reading his public posts and watching his occasional (rare) public appearances — that he is fundamentally an autocratic sociopath. But because he’s so rich, the usual aphrodisiac effect of great wealth kicks in and journalists (and others) who should know better succumb to the idea that if he is so rich then he must be so smart. Well, he is smart. But he ain’t interested in other people, or capable of emphathising with them..

The autocratic bit is easy to document btw. You only have to look at the relevant paragraph in Facebook’s SEC filings.

Here it is (on page 25 of the filing

Siva Viadhyanathan has also been thinking about Zuckerberg for a long time and has now written an interesting essay on what he has finally concluded. He used to think of Zuckerberg, he says, as an idealist brought up in a bubble and so was puzzled by some of the things he allowed to happen (because, remember, he has absolute power over that company of his.) A key factor in Siva’s change of mind seems to have been Steven Levy’s book, Facebook: The Inside Story.

I expected that Zuckerberg was experiencing cognitive dissonance while watching his dear company be exploited to empower genocidal forces in Myanmar, religious terrorists in Sri Lanka, or vaccine deniers around the world.

I was wrong. I misjudged Zuckerberg. Another thing I learned from Levy’s book is that along with an idealistic and naive account of human communication, Zuckerberg seems to love power more than he loves money or the potential to do good in the world.

Having studied just enough Latin in prep school to get him in trouble, Zuckerberg was known to quote Cato, shouting “Carthago delenda est” (Carthage must be destroyed) when referring to Google. Emperor Augustus was a particular inspiration, Levy reports, and Zuckerberg named his child after Augustus, the adopted son of the tyrant Julius Caesar who ruled over the greatest and most peaceful span of the Roman Empire as its first emperor.

It was not Zuckerberg suffering from cognitive dissonance. I was. As I watched him cooly face questions from congressional representatives about the Cambridge Analytica debacle, he never seemed thoughtful, just disciplined.

That Facebook could serve people well—and it does—and that it could be abused to contribute to massive harm, pain, and death, didn’t seem to generate that one troublesome phenomenon that challenges the thoughtful: Contradiction.

Zuckerberg continued and continues to believe in the positive power of Facebook, but that’s because he believes in the raw power of Facebook. “Domination!,” he used to yell at staff meetings, indicating that everything is a game. Games can be won. He must win. If a few million bones get broken along the way, his game plan would still serve the greatest good for the greatest number.

He believes in himself so completely, his vision of how the world works so completely, that he is immune to cognitive dissonance. He is immune to new evidence or argument. It turns out megalomaniacs don’t suffer from cognitive dissonance.

Like the notorious architect Philip Johnson, or Robert Moses, the tyrannical planner of New York, Zuckerberg, says Siva,

is a social engineer. He knows what’s best for us. And he believes that what’s best for Facebook is best for us. In the long run, he believes, Facebook’s domination will redeem him by making our lives better. We just have to surrender and let it all work out. Zuckerberg can entertain local magistrates like Trump because Zuckerberg remains emperor.

Nice, perceptive essay by a formidable scholar.

Are Universities Going the Way of CDs and Cable TV?

Although it probably seems inconceivable to those of us who work in universities, the shock of the pandemic will lead to radical changes in the way most of these institutions work. This essay is interesting because it’s by Michael Smith, who is Professor of Information Technology and Marketing at Carnegie Mellon and the co-author of Streaming, Sharing, Stealing: Big Data and the Future of Entertainment.

He starts with a question the Wall Street Journal asked in April:

Do students think their pricey degrees are worth the cost when delivered remotely? “One student responded with this zinger, Smith writes,

“Would you pay $75,000 for front-row seats to a Beyoncé concert and be satisfied with a livestream instead?” Another compared higher education to premium cable—an annoyingly expensive bundle with more options than most people need. “Give me the basic package,” he said.

“As a parent of a college-age child”, Smith continues, “I’m sympathetic to these concerns. But as a college professor, I find them terrifying. And invigorating”.

Why terrifying?

Because I study how new technologies cause power shifts in industries, and I fear that the changes in store for higher education are going to look a lot like the painful changes we’ve seen in retail, travel, news, and entertainment.

Consider the entertainment industry.

Throughout the 20th century, the industry remained remarkably stable, despite technological innovations that regularly altered the ways movies, television, music, and books were created, distributed, and consumed. That stability, however, bred overconfidence, overpricing, and an overreliance on business models tailored to a physical world.

Trouble arrived early in the 21st century, when upstart companies powered by new digital technologies began to challenge the status quo. Entertainment executives reflexively dismissed the threat. Netflix was “a channel, not an alternative.” Amazon Studios was “in way over their heads.” YouTube? No self-respecting artist would ever use a DIY platform to start a career. In 1997, after one music executive heard songs compressed into the MP3 format, he refused to believe anybody would give up the sound quality of CDs for the portability of MP3s. “No one is going to listen to that shit,” he insisted. In 2013, the COO of Fox expressed similar skepticism about the impact of technological change on his business. “People will give up food and a roof over their head,” he told investors, “before they give up TV.”

We all know how that worked out: From 1999 to 2009, the music industry lost 50 percent of its sales. From 2014 to 2019, roughly 16 million American households canceled their cable subscriptions.

I remember this in the broadcasting business. In the mid- to late-1990s I was a consultant to a firm in the radio business. I spent many fruitless hours trying to explain to them the significance of streaming media, but they couldn’t get it. Where would all those servers come from? And what about the absence of broadband connections? And so on. The iPlayer and Video on Demand — and podcasting — were unimaginable then, even though they were emerging in embryonic form. (Anyone remember RealAudio?)

Similar dynamics are at play in higher education today, says Smith. Universities have long been remarkably stable institutions. But,

That stability has again bred overconfidence, overpricing, and an overreliance on business models tailored to a physical world. Like those entertainment executives, many of us in higher education dismiss the threats that digital technologies pose to the way we work. We diminish online-learning and credentialing platforms such as Khan Academy, Kaggle, and edX as poor substitutes for the “real thing.” We can’t imagine that “our” students would ever want to take a DIY approach to their education instead of paying us for the privilege of learning in our hallowed halls. We can’t imagine “our” employers hiring someone who doesn’t have one of our respected degrees.

But we’re going to have to start thinking differently…

Good essay. Worth reading in full if you work in Higher Ed. And the funniest thing of all is that Eli Noam published his amazingly far-sighted essay, “Electronics and the Dim Future of the University” in 1995! But it seems that no Vice-Chancellors or university Presidents read it! I did, though, because I was then teaching at the Open University, and of course we got it — but I guess that was probably because the OU was emphatically NOT a traditional university. We had no stake in the old system.

Oh, and if you haven’t been keeping up with how MOOCs have evolved, here’s a good example from Princeton.

Quarantine diary — Day 95

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Thursday 28 May, 2020

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Deconstructing Cummings’s Downing Street statement

Wonderful analysis of the Cummings document by the FT’s David Allen Green. Takes the form of a 25-minute video going through the document line by line, but there’s also a transcript if you’re in a hurry. It’s a fascinating piece of work. Allen thinks that the entire document was drawn up by a (no doubt expensive) lawyer because it reads like a witness statement as used in trials. (But there’s no signature at the bottom attesting that it is the truth, the whole truth and nothing but the truth!).

The only thing he misses is the fact (mentioned in the Wired report discussed on this blog yesterday) that Cummings retrospectively added to his blog post of March 4, 2019 to make it look as thought he was exceedingly prescient about this kind of pandemic.

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Charlie Warzel on de-platforming Trump

Useful piece by Charlie sparked by the thought that Twitter might ban Trump.

“The strategy of power now is not to dominate the whole narrative,” Peter Pomerantsev, a senior fellow at the London School of Economics and the author of “This Is Not Propaganda: Adventures in the War Against Reality” told me recently. “It’s to polarize citizens and construct a very potent worldview and to alienate them from the truth. When journalists speak truth to power they’re by nature giving the powerful the opposition they want.”

Naturally, media outlets and reporters, not wanting to be bullied or discredited, adopt an adversarial approach. This leads to some great, important journalism but also a fair amount of grandstanding, which then become ammunition for the president and his supporters.

This situation is hard for journalists to get their heads around, Mr. Pomerantsev says. “We’re trained to stand up to the powerful,” he Pomerantsev said. “But now the powerful are comfortable with us doing the punching — just look at how they’re attacking.”

It’s basically a cycle that requires participation from all parties: the president (who initiates it), Twitter (which tolerates it) and the media (which amplifies, frequently to the president’s advantage). Removing one participant gums up the cycle, but does not stop it outright.

How Trump proposes to go after Twitter for labelling his tweets

He’s gone for the ‘nuclear strike’ — to try to modify Section 230 of the 1996 Communications Decency Act, (which is Title V of the sprawling 1996 Telecommunications Act). The Section is the one that exempts platform providers from legal liability for stuff that users post on their platforms. It’s essentially the bedrock of their impunity.

The key part of the Section reads as follows:

(c) Protection for “Good Samaritan” blocking and screening of offensive material

(1) Treatment of publisher or speaker 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.

(2) Civil liability No provider or user of an interactive computer service shall be held liable on account of—

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or

(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1).

This is what Trump’s draft Executive Order targets.

The thrust of the Order is that Twitter’s labelling of Trump’s tweets as inaccurate is not protected under Subparagraph C(2).

“The provision does not extend to deceptive or pretextual actions restricting online content or actions inconsistent with an online platform’s terms of service. When an interactive computer service provider removes or restricts access to content and its actions do not meet the requirements of Subparagraph C (2) (A), it is engaged in editorial conduct.”

So the Order directs the Federal Communications Commission (FCC) to conduct an inquiry to “clarify”

This is going to be interesting. If nothing else, it guarantees that all the tech companies will be pouring money into Joe Biden’s campaign, because Section 230 has always been their get-out-of-gaol card. Indeed, for social-media companies it’s what underpins their business model.

And… Right on cue, up pops Mark Zuckerberg (who has had a couple of dinners recently with Trump, I believe) on Fox News yesterday criticising Twitter for fact-checking Trump’s tweets, saying private technology companies “shouldn’t be the arbiter of truth of everything that people say online”. Zuckerberg is keeping his political options open. Creep.

Every stock is a vaccine stock

What’s the value of a Covid vaccine — and to whom? General Electric stock was rocketing up on Tuesday, but not because of anything the company did or announced. What’s going on is that any positive news about a Covid vaccine Recent Covid-19 vaccine serves as a catalyst, making every stock feel like a vaccine stock.

Fascinating post by Tyler Cowen:

It’s not surprising that when Moderna reports good vaccine results, Moderna does well. It’s more surprising that Boeing and GE not only do well they increase in value far more than Moderna. On May 18, for example, when Moderna announced very preliminary positive results on its vaccine it’s market capitalization rose by $5b. But GE’s market capitalization rose by $6.82 billion and Boeing increased in value by $8.73 billion.

A cure for COVID-19 would be worth trillions to the world but only billions to the creator. The stock market is illustrating the massive externalities created by innovation. Nordhaus estimated that only 2.2% of the value of innovation was captured by innovators. For vaccine manufacturers it’s probably closer to .2%.

The disconnect between stock markets and the real world is truly mysterious.

Quarantine diary — Day 68

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The real test of an AI machine? When it can admit to not knowing something

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This morning’s Observer column on the EU’s plans for regulating AI and data:

Once you get beyond the mandatory euro-boosting rhetoric about how the EU’s “technological and industrial strengths”, “high-quality digital infrastructure” and “regulatory framework based on its fundamental values” will enable Europe to become “a global leader in innovation in the data economy and its applications”, the white paper seems quite sensible. But as for all documents dealing with how actually to deal with AI, it falls back on the conventional bromides about human agency and oversight, privacy and governance, diversity, non-discrimination and fairness, societal wellbeing, accountability and that old favourite “transparency”. The only discernible omissions are motherhood and apple pie.

But this is par for the course with AI at the moment: the discourse is invariably three parts generalities, two parts virtue-signalling leavened with a smattering of pious hopes. It’s got to the point where one longs for some plain speaking and common sense.

And, as luck would have it, along it comes in the shape of Sir David Spiegelhalter, an eminent Cambridge statistician and former president of the Royal Statistical Society. He has spent his life trying to teach people how to understand statistical reasoning, and last month published a really helpful article in the Harvard Data Science Review on the question “Should we trust algorithms?”

Read on

Some historical perspective on the dominance of current tech giants

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From this week’s Economist:

As big tech’s scope expands, more non-tech firms will find their profits dented and more workers will see their livelihoods disrupted, creating angry constituencies. One crude measure of scale is to look at global profits relative to American GDP. By this yardstick, Apple, which is expanding into services, is already roughly as big as Standard Oil and US Steel were in 1910, at the height of their powers. Alphabet, Amazon and Microsoft are set to reach the threshold within the next ten years.

Remember what happened to Standard Oil and US Steel?

If tech companies think they’re states, then they should accept the same responsibilities as states

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It’s amazing to watch the deluded fantasies of tech bosses about their importance. In part, this is because their pretensions are taken seriously by political leaders who should know better. The daftest move thus far in this context was the Danish government’s decision in 2017 to appoint an ‘ambassador’ to the tech companies in Silicon Valley, but it’s clear that some other administrations share the same delusions.

Marietje Schaake, the former MEP who is now International policy director at Stanford’s Cyber Policy Center, has noted this too.

Last month, Microsoft announced it would open a “representation to the UN”, while at the same time recruiting a diplomat to run its European public affairs office. Alibaba has proposed a cross-border, online free trade platform. When Facebook’s suggestion of a “supreme court” to revisit controversial content moderation decisions was criticised, it relabelled the initiative an “oversight board”. It seems tech executives are literally trying to take seats at the table that has thus far been shared by heads of state.

At the annual security conference in Munich, presidents, prime ministers and politicians usually share the sought-after stage to engage in conversations about conflict in the Middle East, the future of the EU, or transatlantic relations. This year, executives of Alphabet, Facebook and Microsoft were added to the speakers list.

Facebook boss Mark Zuckerberg went on from Munich to Brussels to meet with EU commissioners about a package of regulatory initiatives on artificial intelligence, data and digital services. Commissioner Thierry Breton provided the apt reminder that companies must follow EU regulations — not the other way around.

In a brisk OpEd piece in yesterday’s Financial Times, Schaake reminds tech bosses that if they really want change, there is no need to wait for government regulation to guide them in the right direction. (Which is their current mantra.) They own and totally control their own platforms. They can start in their own “republics” today. Nothing stops them proactively aligning their terms of use with human rights, democratic principles and the rule of law. When they deploy authoritarian models of governing, they should be called out. “Instead of playing government”, she writes,

they should take responsibility for their own territories. This means anchoring terms of use and standards in the rule of law and democratic principles and allowing independent scrutiny from researchers, regulators and democratic representatives alike. Credible accountability is always independent. It is time to ensure such oversight is proportionate to the power of tech giants.

Companies seeking to democratise would also have to give their employees and customers more of a say, as prime “constituents”. If leaders are serious about their state-like powers, they must walk the walk and treat consumers as citizens. Until then, calls for regulations will be seen as opportunistic, and corporations unfit to lead.

Bravo! Couldn’t have put it better myself.

Regulatory puzzles

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Interesting conundrum in Ben Evans’s weekly newsletter:

A German court has banned Uber for not applying with taxi regulations; conversely, AirBNB won in France: it can’t be forced to be regulated as an estate agent. The endless ‘software eats the world’ question: how far do we treat a new way of doing X in the same way as the old one? Uber is clearly a different way of doing what we previously called taxis and ‘limousines’ and should probably be subject to the same high-level policy objectives. (You might be able to achieve those objectives differently – you don’t need a physical meter to have a guaranteed fare because GPS can do that – but the objectives might not change.) On the other hand, AirBNB is not doing the same things that a conventional real estate agent (or hotel) does ‘but with an app and with GPS’ – it’s doing something different, and poses different questions (which might or might not require new regulation).

There’s no single regulatory bullet. It’s horses for courses.

What took governments so long to wake up to the tech giants’ power?

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Interesting NYT column by Kara Swisher:

Here’s a little quiz. When was the last time a significant social media network was founded in the United States? And what about a competitive search engine company? An online ad network? And what about a truly wide-ranging e-commerce start-up?

Here are the depressing answers. The social network Snapchat, in 2011. For search, Microsoft’s Bing appeared in 2009, a replacement for its Live Search. I’m drawing a blank on an ad network. With e-commerce, the answer is probably Wayfair, which arrived in 2002, and still has only 1.3 percent of the market (most retail innovation has been in niche areas, like luggage (Away) or special fashion (The RealReal)).

To put this another way: Facebook and its Instagram unit have close to 50 percent of the social media market, dwarfing all the other companies in monthly active users tenfold. Google has about 90 percent of the search market, with Bing and Yahoo dwindling ever further behind by the month. Google and Facebook also suck up 60 percent of the digital ad spend, with only Amazon moving up aggressively in that fast-growing space. And speaking of Amazon, the retail giant has about 50 percent of total e-commerce sales in the United States, with eBay and Walmart at 7 percent and 4 percent, respectively.

Finally, it looks as though the US government is beginning to think that there might be something wrong here. Which prompts three questions:

  1. What took them so long? Was it just that they were still in thrall to Robert Bork’s The Antitrust paradox?
  2. Have they left it too late?
  3. And how do you punish companies that can absorb a $5B fine without missing a beat?

(Interestingly, Amazon.co.uk is currently selling a paperback copy of Bork’s book for £207.02!)