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.

The inescapable infrastructure of the networked world

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This morning’s Observer column:

“Quitting smoking is easy,” said Mark Twain. “I’ve done it hundreds of times.” Much the same goes for smartphones. As increasing numbers of people begin to realise that they have a smartphone habit they begin to wonder if they should do something about the addiction. A few (a very few, in my experience) make the attempt, switching their phones off after work, say, and not rebooting them until the following morning. But almost invariably the dash for freedom fails and the chastened fugitive returns to the connected world.

The technophobic tendency to attribute this failure to lack of moral fibre should be resisted. It’s not easy to cut yourself off from a system that links you to friends, family and employer, all of whom expect you to be contactable and sometimes get upset when you’re not. There are powerful network effects in play here against which the individual addict is helpless. And while “just say no” may be a viable strategy in relation to some services (for example, Facebook), it is now a futile one in relation to the networked world generally. We’re long past the point of no return in our connected lives.

Most people don’t realise this. They imagine that if they decide to stop using Gmail or Microsoft Outlook or never buy another book from Amazon then they have liberated themselves from the tentacles of these giants. If that is indeed what they believe, then Kashmir Hill has news for them…

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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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How life begins

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This is truly extraordinary. A six-minute time-lapse video of how a single cell turns into a tadpole in three weeks. It’s a film of an organism running the code in its DNA. I’ve read about this but always had to imagine what was going on. To see it is awe-inspiring.

HT to Kottke

How the technical is political

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This morning’s Observer column:

The only computer game I’ve ever played involved no killing, zombies, heavily-armed monsters or quests for hidden keys. It was called SimCity and involved developing a virtual city from a patch of undeveloped land. The game enabled you to determine where to place development zones, infrastructure (like roads and power plants), landmarks and public services such as schools, parks, hospitals and fire stations. You could decide the tax rate, budget and social policy for your city – populated by Sims (for “simulated persons”, I guess) who had to live and work in the three zones you created for them: residential had houses and apartment buildings, commercial had shops and offices and industrial had factories, warehouses, laboratories and (oddly) farms.

SimCity was the brainchild of Will Wright, a software developer who had first made a splash with a shoot-’em-up (well, bomb-’em-flat) video game in which the player controls a helicopter dropping bombs on islands. But he became more fascinated with the islands than with the weaponry and started to wonder what a virtual city would be like – and how it would work. What he came up with was magical for its time: it gave the player a feeling of omnipotence: you decided where Sims should live, whether their electricity should come from nukes, where schools and offices should be located, how much tax they paid…

What you discovered early on, though, was that your decisions had consequences…

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