Category Archives: Silicon Valley

Can the tech giants be stopped?

Jonathan Taplin writes: I would date the rise of the digital monopolies to August 2004, when Google raised $1.9 billion in its initial public offering. By the end of that year, Google’s share of the search-engine market was just 35%; Yahoo ’s was 32%, and MSN’s was 16%. Today, under Alphabet, Google’s market share is 87% in the U.S. and 91% in Europe. In 2004, Amazon had net sales revenue of $6.9 billion. In 2016, its net sales revenue was nearly $136 billion, and it now controls 65% of all online new book sales, whether print or digital. In mobile social networks, Facebook and its subsidiaries (Instagram, WhatsApp and Messenger) control 75% of the American market.

This shift has brought about a massive reallocation of revenue, with economic value moving from the creators of content to the owners of monopoly platforms. Since 2000, revenues for recorded music in the U.S. have fallen from almost $20 billion a year to less than $8 billion, according to the Recording Industry Association of America. U.S. newspaper ad revenue fell from $65.8 billion in 2000 to $23.6 billion in 2013 (the last year for which data are available). Though book publishing revenues have remained flat, this is mostly because increased children’s book sales have made up for the declining return on adult titles.

From 2003 to 2016, Google’s revenue grew from about $1.5 billion to some $90 billion as Alphabet. Today, it is the largest media company in the world, collecting $79.4 billion in ad revenue in 2016, according to Zenith. Facebook is a distant second, with $26.9 billion.

The precipitous decline in revenue for content creators has nothing to do with changing consumer preferences for their content. People are not reading less news, listening to less music, reading fewer books or watching fewer movies and TV shows. The massive growth in revenue for the digital monopolies has resulted in the massive loss of revenue for the creators of content. The two are inextricably linked. [Continue reading…]

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Knuckleheads in Trump administration don’t want to let foreign entrepreneurs start new businesses in U.S.

The New York Times reports: The Trump administration said it would delay, and probably eliminate down the line, a federal rule that would have let foreign entrepreneurs come to the United States to start companies.

The decision, announced by the federal government on Monday ahead of its official publication on Tuesday, was quickly slammed by business leaders and organizations, especially from the technology sector, which has benefited heavily from start-ups founded by immigrants.

“Today’s announcement is extremely disappointing and represents a fundamental misunderstanding of the critical role immigrant entrepreneurs play in growing the next generation of American companies,” Bobby Franklin, the president and chief executive of the National Venture Capital Association, a trade association for start-up investors, said in a statement.

He added that even as other countries are going all out to attract entrepreneurs, “the Trump administration is signaling its intent to do the exact opposite.”

The policy being delayed by the Department of Homeland Security, known as the International Entrepreneur Rule, was to go into effect next week, after being approved by President Obama in January during his final days in office.

The rule was enacted to give foreign entrepreneurs who received significant financial backing for new business ventures the ability to come temporarily to the United States to build their companies. Silicon Valley leaders had praised the rule as a kind of “start-up visa.” [Continue reading…]

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Corporate surveillance in everyday life

Cracked Labs reports: In recent years, a wide range of companies has started to monitor, track and follow people in virtually every aspect of their lives. The behaviors, movements, social relationships, interests, weaknesses and most private moments of billions are now constantly recorded, evaluated and analyzed in real-time. The exploitation of personal information has become a multi-billion industry. Yet only the tip of the iceberg of today’s pervasive digital tracking is visible; much of it occurs in the background and remains opaque to most of us.

This report by Cracked Labs examines the actual practices and inner workings of this personal data industry. Based on years of research and a previous 2016 report, the investigation shines light on the hidden data flows between companies. It maps the structure and scope of today’s digital tracking and profiling ecosystems and explores relevant technologies, platforms and devices, as well as key recent developments.

While the full report is available as PDF download, this web publication presents a ten part overview. [Continue reading…]

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How democracy gets hijacked

Carole Cadwalladr writes: In June 2013, a young American postgraduate called Sophie was passing through London when she called up the boss of a firm where she’d previously interned. The company, SCL Elections, went on to be bought by Robert Mercer, a secretive hedge fund billionaire, renamed Cambridge Analytica, and achieved a certain notoriety as the data analytics firm that played a role in both Trump and Brexit campaigns. But all of this was still to come. London in 2013 was still basking in the afterglow of the Olympics. Britain had not yet Brexited. The world had not yet turned.

“That was before we became this dark, dystopian data company that gave the world Trump,” a former Cambridge Analytica employee who I’ll call Paul tells me. “It was back when we were still just a psychological warfare firm.”

Was that really what you called it, I ask him. Psychological warfare? “Totally. That’s what it is. Psyops. Psychological operations – the same methods the military use to effect mass sentiment change. It’s what they mean by winning ‘hearts and minds’. We were just doing it to win elections in the kind of developing countries that don’t have many rules.”

Why would anyone want to intern with a psychological warfare firm, I ask him. And he looks at me like I am mad. “It was like working for MI6. Only it’s MI6 for hire. It was very posh, very English, run by an old Etonian and you got to do some really cool things. Fly all over the world. You were working with the president of Kenya or Ghana or wherever. It’s not like election campaigns in the west. You got to do all sorts of crazy shit.”

On that day in June 2013, Sophie met up with SCL’s chief executive, Alexander Nix, and gave him the germ of an idea. “She said, ‘You really need to get into data.’ She really drummed it home to Alexander. And she suggested he meet this firm that belonged to someone she knew about through her father.”

Who’s her father?

“Eric Schmidt.”

Eric Schmidt – the chairman of Google?

“Yes. And she suggested Alexander should meet this company called Palantir.”

I had been speaking to former employees of Cambridge Analytica for months and heard dozens of hair-raising stories, but it was still a gobsmacking moment. To anyone concerned about surveillance, Palantir is practically now a trigger word. The data-mining firm has contracts with governments all over the world – including GCHQ and the NSA. It’s owned by Peter Thiel, the billionaire co-founder of eBay and PayPal, who became Silicon Valley’s first vocal supporter of Trump. [Continue reading…]

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Donald Trump’s plan to boost the Indian economy

As the Trump administration seems inclined to gut the H-1B visa program, the Washington Post reports: The H-1B program provides American companies with cheap, temporary contractors who often work longer hours than Americans and take on the monotonous programming jobs Americans scorn. Proponents of the program argue that foreign workers increase innovation at American companies as well as contribute to local economies. A few Indians who came on work visas have even gone on to become heads of important American companies.

Meanwhile, India’s growth as a global tech hub has been hampered as tens of thousands of workers have left.

Over the past decade, though, cities like Hyderabad and Bangalore have slowly but surely gained prominence. At first, Hyderabad was mostly a base for outsourcing companies servicing American clients, but now it is home to the biggest offices of Apple, Google, Microsoft and Facebook outside the United States. Amazon, Dell, Uber and others have major operations there. All have huge campuses in a part of the city officially known as Cyberabad.

Cyberabad’s existence is the result of investments in education and infrastructure made by N. Chandrababu Naidu, the chief minister of Andhra Pradesh, where Hyderabad was located until the state was bifurcated in 2014. A network of dozens of information-technology institutes trained a generation of engineers and software developers to work back-end jobs for American companies.

For that generation, getting an H-1B was the holy grail. Even though the work in America could be dull, being there provided a chance to engage with an invigorating culture of innovation that just wasn’t present in India yet. And of course, working abroad meant a huge increase in income and prestige.

But the H-1B cap meant that the bulk of Indian tech workers stayed back. The current cap — not just from India — is 65,000, plus another 20,000 who have graduated from American universities with advanced degrees, down from almost double that at the beginning of the 2000s.

Among those who do get the visas, most ultimately return to settle and work in India. In Hyderabad, many of those returnees are confident that their city can compete with Silicon Valley for India’s brightest young minds.

K.T. Rama Rao, the son of the current chief minister, was one of them. Now he’s the minister for information technology in his father’s government. He pointed to Apple as an example of how Hyderabad could absorb the thousands of workers in a potential future with far fewer H-1Bs — or without them altogether.

“Apple is already moving their maps division here, and they’re doing that because we’re producing more G.I.S. talent than anyone else in the world,” he claimed in an interview, referring to geographic information systems. “Ideally, a president of the United States would have a balanced perspective on business, but if he wants tech firms to stay, he should create better job readiness in the U.S.”

Rao said that legislation targeting big Indian outsourcing companies would wean them away from their dependency on servicing American companies. Without the visa program, they would have to engage in new lines of work that created value in Hyderabad and not abroad, he said. [Continue reading…]

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Google and Facebook take aim at fake news sites

The New York Times reports: Over the last week, two of the world’s biggest internet companies have faced mounting criticism over how fake news on their sites may have influenced the presidential election’s outcome.

On Monday, those companies responded by making it clear that they would not tolerate such misinformation by taking pointed aim at fake news sites’ revenue sources.

Google kicked off the action on Monday afternoon when the Silicon Valley search giant said it would ban websites that peddle fake news from using its online advertising service. Hours later, Facebook, the social network, updated the language in its Facebook Audience Network policy, which already says it will not display ads in sites that show misleading or illegal content, to include fake news sites.

“We have updated the policy to explicitly clarify that this applies to fake news,” a Facebook spokesman said in a statement. “Our team will continue to closely vet all prospective publishers and monitor existing ones to ensure compliance.”

Taken together, the decisions were a clear signal that the tech behemoths could no longer ignore the growing outcry over their power in distributing information to the American electorate. [Continue reading…]

BuzzFeed reports: Facebook employees have formed an unofficial task force to question the role their company played in promoting fake news in the lead-up to Donald Trump’s victory in the US election last week, amid a larger, national debate over the rise of fake and misleading news articles in a platform used by more than 150 million Americans.

The task force, which sources tell BuzzFeed News includes employees from across the company, has already rebutted a statement made by Facebook CEO Mark Zuckerberg at a conference last week that the argument that fake news on Facebook affected the election was “a pretty crazy idea.”

“It’s not a crazy idea. What’s crazy is for him to come out and dismiss it like that, when he knows, and those of us at the company know, that fake news ran wild on our platform during the entire campaign season,” said one Facebook employee, who works in the social network’s engineering division. He, like the four other Facebook employees who spoke to BuzzFeed News for this story, would only speak on condition of anonymity. All five employees said they had been warned by their superiors against speaking to press, and feared they would lose their jobs if named. [Continue reading…]

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Yahoo secretly scanned customer emails for U.S. intelligence

Reuters reports: Yahoo Inc last year secretly built a custom software program to search all of its customers’ incoming emails for specific information provided by U.S. intelligence officials, according to people familiar with the matter.

The company complied with a classified U.S. government demand, scanning hundreds of millions of Yahoo Mail accounts at the behest of the National Security Agency or FBI, said three former employees and a fourth person apprised of the events.

Some surveillance experts said this represents the first case to surface of a U.S. Internet company agreeing to an intelligence agency’s request by searching all arriving messages, as opposed to examining stored messages or scanning a small number of accounts in real time.

It is not known what information intelligence officials were looking for, only that they wanted Yahoo to search for a set of characters. That could mean a phrase in an email or an attachment, said the sources, who did not want to be identified.

Reuters was unable to determine what data Yahoo may have handed over, if any, and if intelligence officials had approached other email providers besides Yahoo with this kind of request.

According to two of the former employees, Yahoo Chief Executive Marissa Mayer’s decision to obey the directive roiled some senior executives and led to the June 2015 departure of Chief Information Security Officer Alex Stamos, who now holds the top security job at Facebook Inc. [Continue reading…]

The Wall Street Journal reports: Big technology companies, including Google, Microsoft Corp., Twitter Inc. and Facebook Inc. denied scanning incoming user emails on behalf of the U.S. government, following a report that Yahoo Inc. had built such a system. [Continue reading…]

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Trump promotes debunked conspiracy theory that Google favors Clinton

Does Netflix want Donald Trump to become the next president? Is Google trying to tip the balance in Hillary Clinton’s favor?

The key to understanding the relationships between powerful corporations and governments is to remember that corporations hope to wield influence in their own favor whoever controls Washington.

As institutional entities, corporate boards and their executives commonly hold power for much longer than U.S. presidents. Indeed, still in power after 18 years, individuals such as Larry Page and Sergey Brin have more secure positions than most dictators.

* * *

In 2012, when Robert Epstein discovered that Google was displaying a security warning blocking access to his website, instead of coming to the most obvious conclusion — that, as the warning indicated, his site was infected with malware — Epstein became convinced that he was a target of corporate malfeasance. The technology giant was supposedly out to crush the little guy. Why exactly Google would harbor “malice” against Epstein was unclear.

Maybe Epstein should have discussed the matter with a therapist to explore his paranoia. Just as importantly, he should have hired a security expert to fix his site. Instead, as a psychologist sadly lacking in self-awareness, Epstein embarked on a quixotic crusade against Google — he’s still fighting. His most recent ally in that fight is Donald Trump.

Were it not for the fact that Epstein has some credentials that sound more impressive than they really are — such as a PhD from Harvard and former editor in chief of Psychology Today — he could more easily be dismissed as just another conspiracy theorist. But when a “distinguished research psychologist” can point to his “peer-reviewed” “research study” published in the Proceedings of the National Academy of Sciences of the United States of America, he surely carries behind him the full weight of scientific authority, right? Not really.

Making a claim reminiscent of the plot in the Netflix version of House of Cards, Epstein says that Google is trying to rig the election to help Hillary Clinton win.

That’s a claim that dovetails perfectly into Russia’s disinformation campaign designed to undermine the credibility of democracy in America. It should thus come as no surprise that state-sponsored RT would gladly help promote Epstein’s claims and now Kremlin-backed Sputnik joins the effort.

Likewise, as a candidate blind to his own shortcomings, Donald Trump has happily jumped on the Epstein bandwagon.

As for the scientific basis of Epstein’s research findings, all one needs to understand is the data provides to his research subjects. When provided with search results that had been skewed in favor of one candidate over another, the subjects views shift in the same direction. But here’s the thing: Epstein hasn’t unearthed a secret Google bias algorithm. He simply constructs the skewed data himself by manually rearranging search results.

Then, having observed the effects of such manipulation, he concludes that if Google was to engineer similar manipulation, it could affect an election outcome. That’s probably true. But it’s one thing to describe what’s possible and quite another to analyze what’s actually happening.

Companies such as Google and Facebook are indeed fully immersed in efforts to manipulate the way people think and feel, but just like every other business they are driven by the simple goal of profit.

Unless a political force arises in Washington that poses an existential threat to Silicon Valley, I think it’s reasonable to assume that none of the technology giants will place their business interests in jeopardy by trying to rig elections.

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With Facebook’s flaws in the spotlight, Mark Zuckerberg’s silence is deafening

Espen Egil Hansen writes: In every TV studio where Facebook’s powerful position is being debated, one chair remains empty. In every newspaper article, every blogpost and every Facebook thread that challenges the company, one participant is missing.

Where is Mark Zuckerberg? A man now more powerful than most state leaders.

When I wrote an open letter to Zuckerberg earlier this month, I had three objectives.

First and foremost, Aftenposten wanted to stop Facebook’s censorship of the documentary photo The Terror of War. We did – but our victory was only symbolic. It just made Facebook see what everybody else is seeing: this picture is a documentation of the horrors of war – not nudity.

My second objective was to encourage debate on Facebook’s ever more powerful role as the world’s most important distributor of news and content. We succeeded in this as well, and I am pleased to see that the debate was international.

Most conspicuous, however, is the deafening silence from Facebook. Yes, they distribute written statements, which are dutifully read out by news anchors at the end of reports, but real participation is more the exception than the rule. Here in Scandinavia, Facebook has even gone so far as to leave it to a Swedish PR company to answer inquiries from the media. This company in turn will tell the press to quote “a spokesperson for Facebook”. [Continue reading…]

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Mark Zuckerberg accused of abusing power after Facebook deletes Vietnam War ‘napalm girl’ post

The Guardian reports: Norway’s largest newspaper has published a front-page open letter to Facebook CEO Mark Zuckerberg, lambasting the company’s decision to censor a historic photograph of the Vietnam war and calling on Zuckerberg to recognize and live up to his role as “the world’s most powerful editor”.

Espen Egil Hansen, the editor-in-chief and CEO of Aftenposten, accused Zuckerberg of thoughtlessly “abusing your power” over the social media site that has become a lynchpin of the distribution of news and information around the world, writing, “I am upset, disappointed – well, in fact even afraid – of what you are about to do to a mainstay of our democratic society.”

“I am worried that the world’s most important medium is limiting freedom instead of trying to extend it, and that this occasionally happens in an authoritarian way,” he added.

The controversy stems from Facebook’s decision to delete a post by Norwegian writer Tom Egeland that featured The Terror of War, a Pulitzer prize-winning photograph by Nick Ut that showed children – including the naked 9-year-old Kim Phúc – running away from a napalm attack during the Vietnam war. Egeland’s post discussed “seven photographs that changed the history of warfare” – a group to which the “napalm girl” image certainly belongs.

Egeland was subsequently suspended from Facebook. When Aftenposten reported on the suspension – using the same photograph in its article, which was then shared on the publication’s Facebook page – the newspaper received a message from Facebook asking it to “either remove or pixelize” the photograph. [Continue reading…]

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How spy tech firms let governments see everything on a smartphone

The New York Times reports: Want to invisibly spy on 10 iPhone owners without their knowledge? Gather their every keystroke, sound, message and location? That will cost you $650,000, plus a $500,000 setup fee with an Israeli outfit called the NSO Group. You can spy on more people if you would like — just check out the company’s price list.

The NSO Group is one of a number of companies that sell surveillance tools that can capture all the activity on a smartphone, like a user’s location and personal contacts. These tools can even turn the phone into a secret recording device.

Since its founding six years ago, the NSO Group has kept a low profile. But last month, security researchers caught its spyware trying to gain access to the iPhone of a human rights activist in the United Arab Emirates. They also discovered a second target, a Mexican journalist who wrote about corruption in the Mexican government.

Now, internal NSO Group emails, contracts and commercial proposals obtained by The New York Times offer insight into how companies in this secretive digital surveillance industry operate. The emails and documents were provided by two people who have had dealings with the NSO Group but would not be named for fear of reprisals.

The company is one of dozens of digital spying outfits that track everything a target does on a smartphone. They aggressively market their services to governments and law enforcement agencies around the world. The industry argues that this spying is necessary to track terrorists, kidnappers and drug lords. The NSO Group’s corporate mission statement is “Make the world a safe place.”

Ten people familiar with the company’s sales, who refused to be identified, said that the NSO Group has a strict internal vetting process to determine who it will sell to. An ethics committee made up of employees and external counsel vets potential customers based on human rights rankings set by the World Bank and other global bodies. And to date, these people all said, NSO has yet to be denied an export license.

But critics note that the company’s spyware has also been used to track journalists and human rights activists.

“There’s no check on this,” said Bill Marczak, a senior fellow at the Citizen Lab at the University of Toronto’s Munk School of Global Affairs. “Once NSO’s systems are sold, governments can essentially use them however they want. NSO can say they’re trying to make the world a safer place, but they are also making the world a more surveilled place.” [Continue reading…]

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Why the world is drawing battle lines against American tech imperialism

Farhad Manjoo writes: Imagine you are a French lawmaker. For decades, you have protected your nation’s cultural output with the diligence of a gardener tending a fragile patch against invasive killer weeds.

You have imposed quotas on the French film industry, required radio stations to play more French music than anyone seems to want to listen to, and you have worked methodically to exempt your actions from international free-trade rules.

And now, out of nowhere, come a handful of American technology companies to wash away all your cultural defenses. Suddenly just about everything that a French citizen buys, reads, watches or listens to flows in some way or another through these behemoths.

There is Facebook co-opting your news media. Amazon is dominating book sales, while YouTube and Netflix are taking over television and movies. And the smartphone, arguably the most important platform for entertainment in this era, is controlled almost entirely by Apple and Google.

This backdrop of social anxiety explains why Europe is on the march against American tech giants. European governments have been at the forefront of an effort to limit the reach of tech companies, most often through privacy regulations and antitrust investigations. Now the European Commission is considering rules that would require streaming companies like Netflix to carry and even pay for local content in the markets they serve.

The European efforts are just a taste of a coming global freak-out over the power of the American tech industry. Over the next few years, we are bound to see increasing friction between the tiny group of tech companies that rule much of the industry and the governments that rule the lands those companies are trying to invade. [Continue reading…]

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For Twitter, ties to CIA create worse ‘optics’ than links to Russian government

L Gordon Crovitz writes: Silicon Valley’s hostility to U.S. intelligence and law enforcement reached a new low last week when Twitter rejected the Central Intelligence Agency as a customer for data based on its tweets — while continuing to serve an entity controlled by Vladimir Putin.

The Wall Street Journal broke the news that Twitter decided U.S. intelligence services could no longer buy services from Dataminr, which has a unique relationship with Twitter. Dataminr is the only company Twitter allows to have access to its full stream of hundreds of millions of daily tweets and sell the resulting intelligence to customers. Dataminr applies “big data” algorithms to identify unusual developments in real time. Customers who can profit from knowing about events instantly, such as hedge funds and news publishers, pay a hefty price for the alerts.

For the past two years, Dataminr provided its service to the CIA under a pilot program. The CIA and Dataminr then negotiated a contract to continue the service, but sources say Twitter CEO Jack Dorsey vetoed the contract at the last minute because he objects to the “optics” of continuing to help intelligence agencies. It’s unclear what happens to a small agreement Dataminr previously made with the Department of Homeland Security. With the new policy dictated by Twitter, Dataminr should drop the claim on its website that it includes “clients in the public sector, providing information first when there are lives at stake.”

Among the customers still getting the Dataminr alerts is RT, the broadcaster created and funded by the Russian government. Vladimir Putin has said that the government runs RT to “try to break the Anglo-Saxon monopoly on the global information streams.” RT disclosed it is a Dataminr customer in its news account of Twitter barring the CIA. Agents of Russia’s Federal Security Service, formerly known as the KGB, have full access via RT to the alerts now being denied to the CIA. [Continue reading…]

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Why we need to tackle the growing mountain of ‘digital waste’

By Chris Preist, University of Bristol

We are very aware of waste in our lives today, from the culture of recycling to the email signatures that urge us not to print them off. But as more and more aspects of life become reliant on digital technology, have we stopped to consider the new potential avenues of waste that are being generated? It’s not just about the energy and resources used by our devices – the services we run over the cloud can generate “digital waste” of their own.

Current approaches to reducing energy use focus on improving the hardware: better datacentre energy management, improved electronics that provide more processing power for less energy, and compression techniques that mean images, videos and other files use less bandwidth as they are transmitted across networks. Our research, rather than focusing on making individual system components more efficient, seeks to understand the impact of any particular digital service – one delivered via a website or through the internet – and re-designing the software involved to make better, more efficient use of the technology that supports it.

We also examine what aspects of a digital service actually provide value to the end user, as establishing where resources and effort are wasted – digital waste – reveals what can be cut out. For example, MP3 audio compression works by removing frequencies that are inaudible or less audible to the human ear – shrinking the size of the file for minimal loss of audible quality.

This is no small task. Estimates have put the technology sector’s global carbon footprint at roughly 2% of worldwide emissions – almost as much as that generated by aviation. But there is a big difference: IT is a more pervasive, and in some ways more democratic, technology. Perhaps 6% or so of the world’s population will fly in a given year, while around 40% have access to the internet at home. More than a billion people have Facebook accounts. Digital technology and the online services it provides are used by far more of us, and far more often.

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Twitter bars intelligence agencies from using analytics service

The Wall Street Journal reports: Twitter Inc. cut off U.S. intelligence agencies from access to a service that sifts through the entire output of its social-media postings, the latest example of tension between Silicon Valley and the federal government over terrorism and privacy.

The move, which hasn’t been publicly announced, was confirmed by a senior U.S. intelligence official and other people familiar with the matter. The service — which sends out alerts of unfolding terror attacks, political unrest and other potentially important events — isn’t directly provided by Twitter, but instead by Dataminr Inc., a private company that mines public Twitter feeds for clients.

Twitter owns about a 5% stake in Dataminr, the only company it authorizes both to access its entire real-time stream of public tweets and sell it to clients.

Dataminr executives recently told intelligence agencies that Twitter didn’t want the company to continue providing the service to them, according to a person familiar with the matter. The senior intelligence official said Twitter appeared to be worried about the “optics” of seeming too close to American intelligence services. [Continue reading…]

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How Facebook plans to take over the world

The Guardian reports: When Zuckerberg addresses the F8 audience [at Facebook’s annual developer conference] it is with the composure and conviction of a president addressing his citizens. “We’ve gone from a world of isolated communities to one global community, and we are all better off for it,” he says as he hammers home his “mission” to connect the world.

He warns of “people and nations turning inwards – against this idea of a connected world and community”, a position that fits both with his ideology and that of Facebook. This is not a speech about technical tweaks, but a state of the union address.

“It takes courage to choose hope over fear,” he adds. Behind the rhetoric and the casual clothes, the message is clear: Facebook is one of the big boys now, taking on huge global challenges and planning for prosperity.

The scale of Facebook’s audience is unprecedented. More than 1.6 billion people use Facebook at least once a month, or half of all internet users. That’s before you count users on other Facebook-owned sites including WhatsApp, which has more than 1 billion monthly active users, and photo-sharing site Instagram, which has 400 million.

Facebook has also introduced its free basics service to 37 countries, offering a free but limited package of apps to mobile phone users, but which some critics say allows Facebook to tightly control the online experience of potentially the next billion people to come online.

“You hear all the platitudes about Facebook connecting the planet, but to say they are doing it for benevolent reasons is absolute nonsense. It’s about connecting commerce, not people,” says venture capitalist and former journalist Om Malik, who reminds us of the hidden agenda of social networking firms: if you’re not paying, you’re the product. [Continue reading…]

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Europe tried to rein in Google. It backfired

The New York Times reports: Google is a top target for European regulators and privacy watchdogs, who openly fear and distrust its dominance. The American tech giant’s search engine alone gobbles up roughly 90 percent of the European market.

But a landmark court ruling intended to rein in Google has instead put it at the forefront of Europe’s enforcement of Internet privacy. That has upended conventional wisdom about the company and raised questions about the role of commercial interests in protecting people’s privacy, often with little or no transparency.

In the almost two years since Europeans gained the “right to be forgotten” on the Internet, Google has passed judgment in over 418,000 cases — roughly 572 a day — from people wanting links of certain search results to be removed, according to the company’s records. It has approved fewer than half of those requests, all behind closed doors.

Google’s total number of privacy-related judgments is double those of most of Europe’s biggest individual national authorities over the same period, even though these public agencies address a wider range of data protection complaints.

Despite a history of animosity toward the company, national regulators have handed over the review powers to Google with few complaints, saying they are merely following Europe’s complex data protection rules. Other search companies, including Microsoft, have been given the same authority, though their number of judgments pales by comparison.

Some consumer groups and privacy experts are not satisfied with that arrangement. They have sounded alarm bells over a for-profit company — one that relies on tapping into people’s digital lives to make billions of dollars and that is the subject of multiple privacy and antitrust investigations — playing such a central role in protecting individuals’ data, and doing so in such a secretive manner. [Continue reading…]

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Facebook’s dominion

The Economist reports: Around a third of Facebook’s active users are in Asia (excluding China, where the service is blocked). Another third are in America and Europe; and the rest are elsewhere around the world. Of the top ten apps in India, Facebook controls three.

Facebook is in such an exalted position because no other company, with the exception of Google, has as many users, knows as much about their behaviour online and can target them as effectively. In addition to all the personal and geographical information, interests, social connections and photos users share, the social network is able to see where else they go online. Anywhere with a “like” symbol feeds back information, as do sites that allow people to log on with their Facebook credentials.

Advertisers can reach consumers with laserlike precision. An energy-drink company may target ads at parents of teenage athletes; a retailer can market goods to people from specific neighbourhoods who have visited its website. “There are three compulsory elements to online advertising today: you have to have a mobile website, and be involved with Google and Facebook,” says Peter Stabler of Wells Fargo, a bank. As a result Facebook claimed 19% and Google 35% of the $70 billion spent on mobile advertising worldwide in 2015, according to eMarketer, a research firm. Twitter and Yahoo had to make do with a meagre 2.5% and 1.5%, respectively.

Facebook is likely to remain on Google’s tail. Its core service continues to grow. Last year it added 200m new users. It has successfully outmanoeuvred regional competitors, such as Orkut, a social network owned by Google that was popular in Brazil. This is partly down to Mr Zuckerberg and his hacker mentality. He believes in rolling out products quickly: “Move fast and break things” is a company motto. [Continue reading…]

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