Mr. Zuck Goes to Washington

ZUCK BE HUMBLE

Mr. Zuckerberg goes to Washington, and the tech journo community can barely contain its excitement, ready to pour itself a big glass of lulz as it watches the little fucker squirm.

From the The New York Times:

Internal staff has pushed Mr. Zuckerberg to answer lawmakers’ questions directly, and not to appear overly defensive. Their goal is to make Mr. Zuckerberg appear as humble, agreeable and as forthright as possible, the people close to the preparations said

Zuck will testify before the Senate Commerce and Judiciary committees on Tuesday and the House Energy and Commerce Committee on Wednesday. Expect calls for privacy regulations from the Left, claims of bias in social media from the Right, and a whole lot of nothing in the end. Oh, Wall Street will be watching closely too: Facebook stock is down about 15% since the Cambridge Analytica news broke, mostly on fears that Facebook’s ad-driven business model or data collection practices may finally run up against regulation from Washington.

The Congressional testimony comes a week after Zuckerberg fielded 45 minutes of questions from big-time jouros (basically a dry run for his Congressional testimony). One recurring theme: that Facebook is an “idealistic and optimistic company”, and for the first decade of its existence, it didn’t really think about how its tool could also be used for bad. And in Zuckerberg’s defense, neither did other people: from the ’08 Obama campaign to the Arab Spring and many grassroots efforts in between, social media has been a tool used for good. Even now, the #MarchForOurLives kids have done a great job using social media to mobilize. As Congress contemplates legislation, it’s important to keep this in mind.

As it turns out, his prepared remarks – released in advance of his testimony – are similar to remarks from last week’s press conference, with Zuckerberg closing out by saying “I know we’ll look back and view helping people connect and giving more people a voice as a positive force in the world.” Yea, if only he could get the Nazis to stfu in the meantime.

No matter what happens, SNL’s Mark Zuckerberg summed it up best this weekend: “unlike my facial expression, Facebook is going to change.”

louis-velazquez-588272-unsplash
It never really made sense to me that the “front” of the Capitol doesn’t face the National Mall | Photo by Louis Velazquez on Unsplash

🚘 Picture me rollin’

Meanwhile, the FTC has confirmed that it’s already investigating Facebook’s privacy practices. It could a huge ass fine, with some 87 million users having their data exposed and Facebook potentially on the hook for a $40,000 fine per violation. Oh, and now some consumer groups are saying the FTC should investigate Facebook’s collection of face and biometric data. TFW 😱

🚫 Deja CubeYou…

In other (or really, the same) news, CubeYou and its Apply Magic Sauce quiz was suspended from Facebook for doing basically what Cambridge Analytica did. This time it took a CNBC investigation to get Facebook’s attention. So have we really learned anything yet?

👩‍⚕️ What to ask next time you see your doctor

Wanna check my data too? In the New York Times, Harvard professor Jonathan Zittrain proposes that Facebook, like doctors or lawyers, should be deemed “fiduciaries,” meaning they’re legally obliged to place clients’ or patients’ interests above their own. It kind of makes sense, right? Companies like Google and Facebook have similarly sensitive, and much more, information as compared to our doctor or lawyer (I skipped both those annual check ups this year), and can certainly wield a lot of power over users. And as these companies and their algorithms get better at predicting and shaping our behavior, wouldn’t it be great if they didn’t just use that power to sell us more stuff or place us in little filter bubbles?

😇 Honestly?

Finally, Facebook has formally announced its support for the Honest Ads Act, which would require all digital platforms with more than 50m users to maintain a public file of all election ads purchased by a person or group who spends at least $500 on the platform. Fast forward to 2020 when thousands of Russian accounts are buying $499 worth of ads.


BACKPAGE.COM ON THE FRONT PAGE

The Feds shutdown Backpage.com on Friday, following it up with a 93-count indictment on Monday, charging its two co-founders and five other employees with money laundering and facilitating prostitution. Backpage is a classifieds website (think Craigslist for creeps/felons) that’s faced persistent allegations of facilitating illegal prostitution that law enforcement has been after for years. Importantly, this has nothing to do with Congress passing a crappy bill called FOSTA/SESTA, which, while trying to stop online sex trafficking, will make the problem worse (my explanation). President Trump hasn’t signed the bill into law yet, so color me shocked when a Congresswoman is trying to claim victory for something she didn’t really have anything to do with:

The shutdown is actually the result of long-running court cases in numerous states that have recently found Backpage.com is not entitled to immunity under Community Decency Act § 230, the statute which generally provides for immunity from liability for internet intermediaries.


👮‍♂️ This week Amazon should…

Call Alexa to the witness stand. This according to a CNet report, where a man’s own pacemaker is being used against him to show he committed arson, and wasn’t asleep – as he’d claimed – when his house caught fire. Of course, it won’t stop at pacemakers. From the law’s perspective, the data is fair game under the 4th Amendment, so if law enforcement gets a warrant, Alexa can be dragged into court.  And if it’s Alexa’s word against mine, I don’t like my chances.


📬 I don’t care about your damn emails! In a sign that whitehouse.gov might be as vulnerable as whitehouse.com, a report says that most domains under the purview of the Executive Office of the President aren’t using a certain protocol to protect email addresses from phishing and other hacking attacks (Cyberscoop).

🎭 When is anonymous anonymous? A Texas court may soon have the answer, but not before Big Tech weighs in (Law360).

👾Instructions on how to use Cloudflare’s new 1.1.1.1 to get a truly encrypted DNS service and keep your ISP out of your shit (Ars Technica).

🎧 What’s a stream cost? Music licensing is complex and expensive (unless you’re YouTube. A graph comparing artist revenue, users, and loss per user of major streaming platforms (Information Is Beautiful).

Welcome to Codebrief

Welcome to Codebrief. It’s a weekly newsletter providing a roundup of tech, privacy and legal news with a point of view, without the bullshit. Its simple goal is to help you understand the week’s news and why it matters – all while providing the occasional lukewarm take. Tech news doesn’t have to be dry and dense, so we’re out to make it enjoyable.

I’ve been blogging since the beginning of 2018, and the newsletter is an effort to bring regular news to readers in a more intimate format.

Continue reading Welcome to Codebrief

Facebook Unbundled

Remember When Craigslist Was the Site Being Unbundled? Now It’s Facebook

Subscribe to my weekly tech, privacy and legal newsletter.

In 2012, Andrew Parker, A VC at Spark Capital, put together a now famous graphic of all the marketplace companies trying to carve out a niche from craiglist.

Now, it seems like Facebook is the company that many entrepreneurs are trying to carve niches out from. In the last few weeks, there’s been a lot of comments to the effect of “I’d love to delete Facebook, but I use [Messenger, Groups, Events] a lot and there’s not real substitute.” All of these niches are uniquely enabled by Facebook’s Social Graph, but, to a varying degree, companies have had success in carving out a nice business for themselves.

The great Facebook unbundling

Unfortunately (for competition’s sake), Facebook has also bought some of the competitors that once encroached on crucial FB functionalities (Instagram and photo sharing, Whatsapp and messaging). Additionally, some of these companies existed before Facebook, but have remained viable businesses over the years through some differentiation. Some of these startups may occupy multiple niches, but I highlighted their main functionality here.

Beyond Facebook Analytica: Privacy Law Explained

Cambridge Analytica was bad, but Facebook’s collection of data is just the way the government wants it

It’s been almost two weeks since the Cambridge Analytica scandal broke for the third time since 2015, so it’s time to zoom out a bit and look more broadly at privacy law in the United States, and what those laws mean for a company like Facebook.

Like many stories that coastal elites and thought leaders make a fuss about, this one begins at that school in Cambridge, Massachusetts.

The idea of a “right to privacy” or “right to be left alone” all began in 1890 when two elitist Harvard law students were concerned about the intrusions upon their lives in high society posed by journalists and the fancy new instantaneous camera. Basically, they were worried their dinner parties would be ruined; so worried, in fact, that they wrote a law journal article about it that I assume at least four people have read. This article laid the foundation for the modern formulation of a “right to privacy.”

Let’s walk across the Harvard Yard (is that what people call it?) and skip forward 110 years to the dorm room of a computer science prodigy known by his Live Journal name Zuck On It. Mark Zuckerberg created Facebook for precisely the opposite reason as those snobby law students: he was an awkward computer geek and just wanted a way to meet girls. So even at first conception, we see the right to privacy (snobby law students) and Facebook (nerdy computer geeks) are fundamentally at odds. Remember, before Facebook, Zuckerberg got himself in trouble for making Facemash (think hot or not), which he built by hacking into the database of each Harvard house and taking the photos from each face book.

Lucky for us, Zuckerberg documented his every move when he built Facemash in 2003. He’s a little intoxicated!

Continue reading Beyond Facebook Analytica: Privacy Law Explained

Spotify, Copyright and the Death of the Album

Together, Spotify and artists have killed the album, perhaps bringing music copyright down with it

 

Analysis of Spotify’s F1 filing for its impending IPO have all rested on the fundamental assumption that power in the music industry flows from copyright control, and for Spotify to achieve sustained success, it’ll need to either gain leverage such that it can negotiate better copyright licensing deals or it’ll need to acquire its own copyrights.

This is incorrect. In fact, the long-term success of truly disruptive startups has long depended on upending old business models and creating value in new ways.

Spotify lost $1.5 billion in 2017, illustrating the current music industry dynamics that have made it nearly impossible for any digital music startup to build a sustainable business. The “problem” with Spotify has always been that the record labels own the copyright to the music, forcing Spotify to pay nearly 70 percent of its revenue to them in royalties.

Thus, Spotify’s margins are completely at the mercy of the record labels and the deals Spotify must cut with them. Generally, new music is granted a copyright for the life of the artist plus 70 years. The labels’ power stems first from their control of copyright on new albums. From this, they control distribution, marketing, and sales. But, both Spotify and artists may be pushing towards a future—inadvertently or not—where the album format, and thus copyright itself, is no longer relevant. This puts the labels in a precarious position and gives the streaming companies and artists an opportunity to explore new, innovative business models.

Continue reading Spotify, Copyright and the Death of the Album

Ring’s Patents and Amazon’s Everything Ambitions

Amazon wants to own your home; Ring’s IP gives it the opportunity to do just that

By now, everyone has heard the news of Amazon’s $1+ billion acquisition of smart-home startup Ring, most famous for its video-enabled doorbell and “failed” Shark Tank appearance.

Amazon’s acquisition of Ring marks its latest move into the smart home/ home security space.

Understanding Amazon

It’s become apparent that the $50 billion home security market is the first real use case or potential “killer app” for the smart home. With the Ring purchase and its recent purchase of another smart home startup, Blink, Amazon is positioning itself to win the space. But for Amazon, “winning” a space doesn’t simply mean gaining a few customers and selling them a bunch of stuff. Time and time again, they’ve executed against a very specific strategy:

  • Invest in a market with massive fixed costs but the potential to benefit from economies of scale
  • Build an integrated solution, justified by the fact that Amazon itself will use it
  • Open up the integrated solution to third parties, providing the “primitives” for continued development on top of the Amazon platform

The Amazon Marketplace (the core ecommerce offering) and Amazon Web Services are the two most prominent and realized exercises of this strategy, but it is actively pursuing the strategy in logistics, food services, and now, the smart home. Notably, Amazon’s moves into all of these markets feed off each other. For instance, its moves into logistics—particularly its goal to solve the “last mile problem”—is directly strengthened by its effort to own the smart home, particularly the home security system.

Continue reading Ring’s Patents and Amazon’s Everything Ambitions

When a “Sex Trafficking” Bill Actually Makes Sex Trafficking Worse

The House just passed a bill to address online sex trafficking; it highlights everything that’s wrong with U.S. politics

On February 27, the House of Representatives passed the “Allow States and Victims to Fight Online Sex Trafficking Act” (FOSTA). Unfortunately, the bill with a noble-sounding name is anything but.

At its core, FOSTA is aimed at amending Section 230 of the Community Decency Act, a statute which literally makes the internet as we know it possible. Simply put, it prevents online platforms from being held liable for their users’ speech, except in certain, limited circumstances (e.g. federal criminal activity, IP infringement). Importantly, it also does not punish internet companies for moderating content. They can moderate as much as they’d like, and it won’t be held against them (“you took down this post but not that one!” isn’t something a prosecutor can say). FOSTA would change this, by making websites liable for “knowingly assisting, supporting or facilitating” a violation of sex trafficking laws, which could have two main consequences:

  • Creates a “moderator’s dilemma” for internet platform and their efforts to moderate content, leading to either of two undesirable outcomes
  • Makes it difficult for smaller internet companies to compete with internet giants and their limitless resources

Let’s forget for a second the fact that even the Department of Justice has come forward saying that existing laws are sufficient and FOSTA actually makes it more difficult for prosecutors to prove up cases against internet companies and examine these two issues.

Photo by Rachael Crowe on Unsplash

Continue reading When a “Sex Trafficking” Bill Actually Makes Sex Trafficking Worse