Posts Tagged ‘Facebook’

‘Safety’ Stocks Drive Autumn Market Rally

September 19, 2018

Biggest gainers in the S&P 500 this month include firms focusing on telecommunications services, consumer staples and utilities

Many of the shares that powered the Dow industrials, S&P 500 and Nasdaq Composite to highs earlier in 2018 have tumbled this month.
Many of the shares that powered the Dow industrials, S&P 500 and Nasdaq Composite to highs earlier in 2018 have tumbled this month.PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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High-dividend “safety” stocks are leading U.S. stock indexes’ latest assault on record highs, the most recent sign of how a nine-year-long market rally is reshaping longstanding investor behaviors.

This month, the biggest gainers in the S&P 500 include firms focusing on telecommunications services, consumer staples and utilities—so-called safe sectors whose steady dividend payouts have long made them investor favorites when markets are volatile or declining. These shares typically lag behind major indexes during rallies, in part because they are perceived to offer limited potential gains. But in September, telecom shares are up 3.1%, consumer staples are up 1.5% and utilities are up 1.5%, versus a 0.1% increase in the S&P 500.

Some companies, like Hershey Co. HSY -0.32% , have rallied after increasing their dividend payouts. Others have jumped on industry-specific news: cigarette makers Philip Morris International Inc. PM 0.04% and Altria Group Inc. MO -0.48% increased after the head of the Food and Drug Administration said he was considering banning flavored e-cigarettesfrom the U.S., while Corona brewer Constellation Brands Inc. rose after saying it was investing money in a Canadian marijuana grower.

Many of the shares that powered the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite to highs earlier in 2018 have tumbled this month. Apple Inc., Amazon.com Inc.and Alphabet Inc. each has declined at least 3% apiece in September, partly reversing double-digit percentage gains for the year. Facebook Inc. has declined more than 8% this month, adding to its retreat in the second half of this year.

The gyrations show that cautious investors are beginning to look beyond the year’s big market winners and seek protection against the prospect of large swings. The S&P 500 is up 8.6% this year and is less than 1% from its Aug. 29 record. Yet many analysts and traders are wary that major stock indexes could decline if the U.S. trade fight with China intensifies, a selloff in technology shares deepens or an emerging markets rout spills over into developed markets.

“As August ended and we rolled into September, there’s been a natural inclination towards more defensive sectors,” said Michael Arone, managing director and chief investment strategist at State Street Global Advisors. “We’re continuing to see the struggle between the China hawks [in the White House] and those who want to put the trade dispute behind them.”

Beyond the bond proxies, there are other signs of investors taking out protection against a snapback.

The Cboe Volatility Index, which measures investors’ expectations for swings in the S&P 500 over the next 30 days, has climbed 7.6 this week. The VIX often rises when stock prices fall.

And investors are holding roughly 5.1% of their portfolios in cash, the highest share in 18 months, according to Bank of America Merrill Lynch’s monthly global fund manager survey.

To many, the moves reflect nervousness as investors get deeper into what has often been a rocky period for the stock market. September has historically been the worst month of the year for the S&P 500, according to investment research firm CFRA, which studied market returns going back to 1945.

This year has been no exception. Technology stocks, the best-performing sector in the S&P 500 for the year, broadly retreated after Facebook and Twitter executives testified before Congress earlier in the month. The tech sector is down 1.9% in September, on pace for its worst month since March.

Yet some analysts are skeptical the rally in so-called safety trades is sustainable.

The Federal Reserve is widely expected to raise short-term interest rates by a quarter percentage point when it meets later this month. That could put fresh pressure on both U.S. government bonds and their stock-market proxies, which typically lag behind market indexes in a rising-rate environment.

Despite their recent rally, shares of utilities companies in the S&P 500 are up just 2.3% for the year—trailing the broad index’s 8.6% gain. Treasurys also remain weaker for the year. The yield on the benchmark 10-year U.S. Treasury note settled Tuesday at 3.048%, compared with 2.409% at the end of last year. Yields rise as bond prices fall.

Another factor that could slow the bond-proxy rally: lackluster earnings growth.

The consumer-staples sector is expected to post the slowest earnings growth of the S&P 500’s 11 groups in the third quarter, followed closely by the real-estate and utilities sectors. Companies selling household goods have been particularly hard hit this year by a lack of pricing power, which has hampered their efforts to offset rising costs.

But for now, few analysts see the factors that have kept investors on guard disappearing anytime soon. The possibility of the trade fight escalating further will likely keep optimism reined in for the time being, even with U.S. economic data largely continuing to impress investors.

Just 32% of individual investors believe the stock market will be higher in six months, down 10 percentage points from the prior week and below the historical average of 39%, according to data through Wednesday from the American Association of Individual Investors.

“The wild card is the tariffs, and if they end up actually changing the narrative and pushing the U.S. economy lower,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co.

Write to Akane Otani at akane.otani@wsj.com

https://www.wsj.com/articles/safety-stocks-drive-autumn-market-rally-1537349400

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Facebook Sought Access to Financial Firms’ Customer Data

September 18, 2018

As privacy concerns arose, some agreements limited how social-media company could use the information

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Facebook pressed financial firms as recently as last year for the ability to use customer data flowing through its Messenger platform.
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Facebook Inc. FB -1.07% has been under scrutiny for months over its handling of personal data, but it has been haggling with financial firms over its access to sensitive financial data for years.

As recently as last year, the social-media company pressed financial firms for the ability to use customer data flowing through its Messenger platform for a range of purposes, including advertising, according to people familiar with the matter and documents reviewed by The Wall Street Journal. Concerned about privacy, several firms negotiated bespoke agreements that limited how Facebook could use any financial information that would pass through its servers.

The negotiations highlight a dilemma facing Facebook as it balances its need for detailed user data to better target advertisements and increase user engagement with concerns about how best to handle users’ most sensitive personal information. It is an issue that has taken on new importance following the uproar over Facebook’s ties to political analytics firm Cambridge Analytica, which accessed information on as many as 87 million users of the social-media network without their consent.

Facebook has in recent months taken steps to give users more control over the massive cache of data it collects. Earlier this year, the company changed its privacy policy to more clearly spell out how it handles advertising and user data. In April, before the European Union began enforcing its General Data Protection Regulation privacy law, Facebook asked users to review information about different types of advertising.

“Like many online companies, we partner with financial institutions to improve people’s commerce experiences, like enabling better customer service, and people opt into these experiences,” said Facebook spokeswoman Elisabeth Diana. “We’ve emphasized to partners that keeping people’s information safe and secure is critical to these efforts. That has been and always will be our priority.”

She said Facebook hasn’t and doesn’t use consumer financial data for so-called ad targeting, or placing ads in front of specific audiences.

Facebook’s negotiating stance with financial firms evolved over the years, ranging from asserting ownership of all data that passes through its servers to, later on, allowing financial firms to restrict its use of the information. Several of the deals were negotiated ahead of Facebook’s 2017 developer conference, when more than a dozen companies in multiple industries, including financial services, launched services on Messenger.

Prior to the launch, Facebook’s privacy policy said “we use all of the information we have about you to show you relevant ads.”

In conversations with American Express Co. in 2016, Facebook executives said they wanted to use individualized cardholder spending data that passes through Facebook for a variety of purposes, according to a person familiar with the matter. That would have allowed them to use the data for ad targeting, the person said.

The companies were discussing launching an AmEx chatbot on Facebook that would send transaction-level alerts to AmEx U.S. cardholders who sign up for the service. Those alerts function like purchase receipts that tell cardholders when their AmEx card has been used to make a purchase.

AmEx didn’t want Facebook to use individualized data for anything besides servicing cardholders who opted into the chatbot, the person said, and instead agreed to provide aggregated transaction data for ads and other purposes.

After Bank of America Corp. reviewed Facebook’s terms, it decided it would move its clients who engage in private messaging with the bank on Facebook off of the site so that Facebook wouldn’t gain access to their financial data, according to a person familiar with the matter.

When Wells Fargo & Co. launched a chatbot pilot with Facebook in 2017, it informed customers that Facebook would have access to their Messenger conversations with bank representatives, per its data policy. “Customers were cautioned that they should not enter account numbers or other sensitive data in their chatbot conversations,” a spokeswoman said. The 5,000-customer pilot ended in April.

PayPal Holdings Inc., which allows users of the payment service to send money through Messenger, negotiated a custom contract that prohibits Facebook from using PayPal customers’ data for advertising or any of Facebook’s own commercial purposes, the company said.

Western Union Co. , which also launched a Messenger-based money-transfer service at the 2017 developer conference, has a custom deal that “reflects our privacy obligations to our customers,” said spokeswoman Pia De Lima.

The deals predate a more recent Facebook effort, reported by The Wall Street Journal last month, to form partnerships with big banks to offer a range of customer services through Messenger, including fraud alerts and a feature that would show its users their checking-account balances. The company said it wouldn’t use any information obtained through those services for ad-targeting purposes.

Banks have been hesitant to give too much control to Facebook. At least one large U.S. bank pulled away from the Facebook talks because of privacy concerns, according to the earlier Journal report.

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com and Emily Glazer at emily.glazer@wsj.com

https://www.wsj.com/articles/facebook-sought-access-to-financial-firms-customer-data-1537263000

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Asian markets mixed after Trump starts more tariffs on China

September 18, 2018

Most Asian markets were mixed on Tuesday after Donald Trump confirmed he will thump China with another round of tariffs, turning up the heat on the trade battle between the world’s two biggest economies.

Investors had been unloading stocks on Monday after reports the president would press ahead with his fight against what he calls Beijing’s unfair practices.

The latest volley from the White House will see $200 billion worth of goods taxed at 10 percent from September 24, going up to 25 percent from January 1 if the sides are unable to hammer out a deal.

He also said he had lined up another $257 billion of imports if Beijing retaliates, as it is expected to do.

© AFP | Donald Trump has lined up almost all China’s exports to the United States for tariffs

That would mean with $50 billion of goods already being hit, Trump will have subjected virtually all goods China ships to the US to tariffs.

Expectations of the announcement sent US markets lower, with technology firms among the big losers. Apple, Google parent Alphabet and Facebook were all sharply down.

However, the tariffs had largely been expected and some key import items had been left off the list of targets but dealers continue to worry, as the chances of an all-out trade war grow.

“It appears that the administration responded to some industry concerns, but for many American businesses and consumers this still represents a rapid acceleration of costs and much higher uncertainty,” Rufus Yerxa, president of the National Foreign Trade Council, told Bloomberg News.

“Business hates uncertainty. They’d rather have an imperfect trading relationship than this much chaos.”

Hong Kong fell 0.7 percent, Sydney lost 0.2 percent and Singapore shed 0.8 percent.

But Shanghai edged up 0.3 percent, Seoul gained 0.1 percent and Tokyo finished the morning 1.1 percent higher.

“While the US tariffs salvo is hardly middling, it’s not as bad as it could have been, so unless China hits with draconian measures, markets should remain supported after this morning’s knee-jerk reactions,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“Ultimately the graduated tariff hike allows more room to negotiate before the thumping 25 percent levy gets triggered, so perhaps China may temper their response accordingly.”

The yuan weakened after the announcement, with the central People’s Bank of China already facing accusations from some in the US that it is allowing the currency to drop to offset the effects of the tariffs. The bank denies the claim.

Other high-yielding and emerging market currencies were also taking a hit. Indonesia’s rupiah fell 0.3 percent as it wallows around levels last seen in 1998 during the Asian financial crisis, while the South Korean won, Australian dollar and Mexican peso were also off.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 23,342.85 (break)

Hong Kong – Hang Seng: DOWN 0.7 percent at 26,738.30

Shanghai – Composite: UP 0.3 percent at 2,660.59

Euro/dollar: DOWN at $1.1679 from $1.1685 at 2040 GMT

Pound/dollar: DOWN at $1.3147 from $1.3159

Dollar/yen: UP at 111.90 yen from 111.83 yen

Oil – West Texas Intermediate: DOWN 32 cents at $68.59 per barrel

Oil – Brent Crude: DOWN 34 cents at $77.71 per barrel

New York – Dow Jones: DOWN 0.4 percent at 26,062.12 (close)

London – FTSE 100: FLAT at 7,302.10 (close)

AFP

Thailand Pro-Democracy Party Founder Arrested For Facebook Posts — Military Government Crack Down on Free Speech

September 17, 2018

Thai police on Monday charged the founder and two members of a new political party opposed to military rule with violating a computer crime law, an offense that could result in a five-year jail sentence, a fine of 100,000 baht ($3,062.79) or both.

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Thanathorn Juangroongruangkit, founder of Thailand’s Future Forward Party

Just last week, the junta, which seized power in 2014, lifted a ban to allow parties to organize ahead of a general election due by May.

Critics say the electoral contest will be set up to ensure the military continues to wield influence over Thailand’s politics.

Thanathorn Juangroongruangkit, 39, founder of the Future Forward Party, and two senior party members were charged under the Computer Crimes Act, after reporting to a Bangkok police station, where they were questioned and fingerprinted.

They are accused of giving false information in a June 29 speech by Thanathorn that was posted on Facebook.

Thanatorn, an auto parts billionaire and newcomer to the political scene, said he and his colleagues rejected the charges.

“The use of the Computer Crimes Act is used with the objective to silence us, threaten us, to make politics of fear happen in this country,” Thanatorn told reporters.

The Future Forward Party launched this year hoping to attract young people and win backing from those seeking an alternative to military rule.

Police said they would forward the case to the attorney general within four months.

Reuters

($1 = 32.6500 baht)

Reporting by Panu Wongcha-um; Additional reporting by Aukkarapon Niyomyat; Writing by Amy Sawitta Lefevre; Editing by Simon Cameron-Moore

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THE SO-CALLED “new blood” political party to be led by “pro-democracy” billionaire Thanathorn Juangroongruangkit has promised to be an alternative to lead the conflict-plagued country out of the cycle of political division.

 

The 39-year-old auto-parts tycoon admitted that he had been described as “another Thaksin Shinawatra”, but asked for time to prove himself.

“There’s no way to prove what I am unless I have the opportunity to get down to it,” he said in a recent interview with The101.world on Facebook Live.

“I want to prove that there are politicians who take the public agenda really seriously.”

Because he is a nephew of businessman-turned-politician Suriya Juangroongruangkit, a key figure in the Thaksin-led Thai Rak Thai Party and former transport minister, critics have expressed doubt whether Thanathorn is really just a successor to his uncle. Also, some people view him as having a close connection with the Shinawatra family, which has retained substantial influence in the previously ruling Pheu Thai Party. Thanathorn, however, dismissed such perceptions, saying that he only saw his uncle once or twice a year, adding that Suriya had been ill and was not politically active.

“People ask how I’m going to clear this impression. I can only say that if you are narrow-minded, you may look at my family name. But if you are open-minded, then look at my actions,” he said. “I don’t have to clear this impression. This is the best I can do.”

The young heir to the giant auto-parts manufacturer Thai Summit announced earlier this month that he would form an “alternative party” to contest the next election as the Election Commission began accepting prospective parties’ pre-registrations. The partial relaxation of the ban on political activities came after almost four years of restrictions imposed since the 2014 military coup.

The group, which is jointly led by “progressive pro-democracy” law professor Piyabutr Saengkanikkul, is seen as a new alternative for progressive young people who have lived in the recent conflict-ridden political climate, which they had done very little to create.

Royalists and conservatives, however, perceive the group as “anti-establishment”. One reason is that Thanathorn is the financier of the political publishing house Same Sky Books, which publishes books critical of the monarchy, while Piyabutr is a member of the Nitirat group that advocates the abolishment of the draconian lese majeste law. Thanathorn said both he and Piyabutr shared the same strong political stance. His goal in politics was to create a future that everyone could share in and steer the country out of conflict and divisions, he said.

Also, he said he believed a strong parliamentary system and the rule of law were the two most critical issues he wanted to advocate.

“Our firm political stance and wish is the crucial point to solving problems and fix the so-called patronage system,” he said. “Our decision about the solution has nothing to do with power, economic power or the need to maintain relationships with anyone. It comes from our very stance and I believe it can tackle complex issues.”

Thanathorn said it would take time before his party could really accomplish anything as it still had to learn along with society. “People, having gone through the deep conflict in the past decade, have learned something. And that forms a foundation for a strong democracy,” he said. Despite being painted with a “red shirt” image, the tycoon asked for support from various colour-coded political camps, including supporters of the defunct pro-coup movement People’s Democratic Reform Committee as well as the red-shirt United Front for Democracy against Dictatorship.

Thanathorn sought support from the red-shirts to help grow and sustain the country’s democracy.

http://www.nationmultimedia.com/detail/politics/30340656

Twitter CEO admits conservative employees ‘don’t feel safe’ expressing opinions

September 15, 2018

Twitter Chief Executive Jack Dorsey admits conservatives are afraid to speak their mind while working at the social network.

Conservative employees “don’t feel safe to express their opinions” within the company, Dorsey told the New York University journalism professor Jay Rosen in an interview published Friday on Recode.

Some Republicans in Congress have accused Twitter of shadow banning, or suppressing the reach of their opinions to followers.

“I think it’s more and more important to at least clarify what our own bias leans towards, and just express it,” Dorsey said.

The admission comes as US Attorney General Jeff Sessions spoke this week about looking into whether Twitter, Google, Facebook and others are suppressing conservative viewpoints.

Dorsey said he was on a listening tour to get a broader opinion of the company and its service.

https://nypost.com/2018/09/14/twitter-ceo-admits-conservative-employees-dont-feel-safe-expressing-opinions/

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Philippines, Facebook and The War On Truth — Deeply worrying scenario for the future of politics and society

September 15, 2018

Over the last months or so, several studies have emerged showing how the social networking site Facebook was “weaponized” during the 2016 elections.

For sure, all of the candidates for different posts utilized the internet, including FB, to reach potential voters

But none was as organized, focused and better funded, as well as cynical about the “facts” they sought to spread, than the organization behind the on-again, off-again candidacy of Rodrigo Duterte, mayor of the city of Davao.

Throughout his political career, Mr. Duterte had marketed himself, in the words of media analyst Jack Swearingen, as “the tough-on-crime, anti-elite Everyman ready to bring back jobs and order.”

In speeches and freewheeling interviews, the supposedly reluctant candidate bombarded the once-benign social network site, as well as the traditional mass media, with vicious attacks on opponents, along with alarmist scenarios, offensive remarks aimed at women, and promises of a bloody war on drugs.

Opinion
Philippine Inq

Sure enough, the number of his adherents grew by leaps and bounds since “any inflammatory content… (does) extremely well on Facebook,” said Swearingen, writing in New York magazine.

Mr. Duterte’s run for the highest post in the land — once deemed a long shot given his localized base of support and his relative anonymity in a field jammed with political heavyweights with a national constituency — was given a huge boost by a tactical business decision that FB made in 2013, three years before the elections.

That year, FB decided to “subsidize internet access to Facebook on mobile devices where cellular data was pricey, physical internet infrastructure was poor, and the smartphone revolution meant many leapfrogged from having no internet access at all to using their smartphone as their only source to the web.”

The Philippines, so FB officials found, “was the perfect country to test this out on,” calling the experiment “Free Facebook.”

When Mr. Duterte finally decided to become a serious presidential candidate, he had a ready platform to reach the millions of Filipino voters.

As Jonathan Corpus Ong of the University of Massachusetts Amherst wrote in Asia Global Online, “Duterte’s campaign machinery strategically focused on assembling bloggers, digital influencers, and fake account operators to tap into the public’s deep-seated anger — and convert these emotions into votes on election day… This tactic owed much of its success to the fact that the Philippines is the world’s ‘social media capital,’ with the average Filipino spending more time on social media than any other nationality.”

Other candidates still used the “traditional” avenues to reach out to voters: advertising, print and broadcast media, as well as the even more traditional rallies, motorcades, posters and personal huckstering, as well as the internet.

But only Mr. Duterte had (and apparently still has) the organized army of cyberwarriors ready to jettison the rules of engagement, including laying waste to the truth and to history, to create an army of fanatical devotees.

It’s doubtful if this was the intent of FB founder Mark Zuckerberg, who started (with a few collaborators) the site as a way for Ivy League male students to “rate” women on campus, and then went on to expand it to a digital web of personal connections. Now he finds himself in the service of trolls, online bullies and fabulists.

Can FB executives, who’ve been forced to meet with authorities in other countries to explain their role in this disturbing development fomented by shadowy groups, still be able to put the foul toothpaste back in the tube? (The pro-Marcos campaign, for instance, has also had considerable success on social media with largely uncontested, obviously well-funded revisionist takes on history—something it couldn’t do in the past with the more rigorous-minded traditional media.)

Will laws and regulations change the way people receive and perceive what they read in the web? And will Filipinos still be able to discern truth from trickery?

“In the Philippines,” said Swearingen, “its Free Facebook program has become so successful that it’s hard to imagine how Facebook and the Philippines could ever untwine themselves from each other… And even after Duterte leaves office, whenever that may be, the Philippines will still be a country where one website’s algorithm determines what 97 percent of internet users look at.”

That’s a scary, deeply worrying scenario for the future of politics and society in this country.

Read more: https://opinion.inquirer.net/116087/war-on-truth#ixzz5R9AcFMHV
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

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Vietnam urges Facebook to open office ahead of controversial cyber law

September 14, 2018

Vietnam has asked Facebook to open a local office as the Communist-ruled country increases pressure on global technology firms to abide by a controversial cyber security law.

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A woman looks at the Facebook logo on an iPad in this photo illustration taken June 3, 2018. REUTERS/Regis Duvignau/Illustration

Critics of the law, which takes effect on Jan. 1, 2019, say it gives Hanoi more power to crack down on dissent because it would require Facebook, Google and other global technology firms to store locally personal data on users in Vietnam and open offices in the country.

“Acting information minister Nguyen Manh Hung suggested Facebook, given its successful business in Vietnam, should reserve revenue to invest in research and development and soon open an office in Vietnam,” the official government website said late on Thursday.

A spokeswoman for Facebook said she had no comment.

Despite sweeping economic reforms and growing openness to social change, the ruling Communist Party tolerates little dissent and exercises strict control over media in Vietnam.

Global tech firms have pushed back against the provisions for locally-stored data, but they have not taken the same tough stance on the parts of the law which bolster the government’s ability to crackdown on online political activism.

Company officials have, however, privately expressed concerns that local data centers and offices could make it easier for the authorities to seize customer data and expose local employees to the threat of arrest.

Simon Milner, Facebook’s vice-president of public policy for Asia Pacific, met on Thursday with Vietnam’s Prime Minister Nguyen Xuan Phuc on the sidelines of a World Economic Forum meeting in Hanoi.

Phuc said Facebook should be responsible for the security, safety and protection of its 60 million user accounts in Vietnam, the government website quoted the prime minister as saying at the meeting.

Gil Kaplan, Under Secretary for International Trade at the U.S. Department of Commerce, said on Monday he would raise the cyber security issue in his meetings this week with Vietnamese government officials, including the Prime Minister.

In July, seventeen U.S. lawmakers urged the chief executives of Facebook and Google to resist changes stipulated by the new law.

Last week, acting information minister Hung said Vietnam should promote home-grown social networks in order to compete with Google and Facebook and capture more of the social network market share in Vietnam, state media reported.

Reporting by Mai Nguyen; Editing by James Pearson

Reuters

Republican anger boils over into political threat for big tech

September 14, 2018

Rightwing criticism of social media groups has become a powerful tool for politicians

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Facebook’s Sheryl Sandberg and Twitter’s Jack Dorsey before the Senate intelligence committee on Wednesday © Getty

By Hannah Kuchler and Richard Waters in San Francisco, and Kadhim Shubber in Washington SEPTEMBER 6, 2018

For just a moment, it looked like big tech was having a good day.

For three hours, Sheryl Sandberg, Facebook’s chief operating officer, and Jack Dorsey, Twitter’s chief executive, carefully managed questions from US senators on how their platforms have become tools for manipulating voters.

Neither company has managed to solve the problem, which looms over the November midterm elections, with Facebook admitting that it expects “bad actors” to try to stir up division.

But Ms Sandberg was composed, Mr Dorsey was thoughtful and, more importantly, their examiners were divided: Republicans looked just as likely to resist regulation in this fourth and final hearing, as they were in the first.

However, as the pair left the room, they walked straight into another political storm. Criticism that social media companies are censoring rightwing views has been bubbling among Republicans all summer, and Alex Jones of Infowars, the rightwing polemicist, was waiting to heckle Mr Dorsey as he left the hearing.

US president Donald Trump, in an interview on Wednesday, accused social media companies of rigging political debate against him. “The truth is they were all on Hillary Clinton’s side,” he said.

The argument has been a powerful tool for Republicans to rally support to their base.

The accusations then became a full-blown political crisis, and a potential legal threat, when the Department of Justice announced that Jeff Sessions, the attorney-general, would discuss with some state attorneys-general whether social media platforms “may be hurting competition and intentionally stifling the free exchange of ideas”.

The announcement was a concerning development for big technology companies; until now, while many have accused them of anti-competitive practices, only the EU has taken significant action, recently applying a €4.3bn fine to Google over its mobile operating system Android.

“It is worrisome when a government agency mentions antitrust and censorship together as it raises a question of whether DOJ might use an investigation to try to pressure social media companies to alter how they handle legal free speech in the various online public squares,” said Heather Greenfield, a spokeswoman for the Computer and Communications Industry Association, said.

The justice department under Mr Sessions has already taken up free speech issues championed by Conservative activists.

It has intervened in the ongoing battle in US universities between progressives and conservatives about what speech should be allowed on campus. In June, the DoJ joined a lawsuit against the University of Michigan that sought to strike down its free speech code, which prohibits “harassment” and “bullying”.

In a speech last year, the attorney-general decried what he called an effort by protesters on US campuses “to silence voices that insufficiently conform with their views”.

Facebook and Twitter go to Washington

Amy Ray, an antitrust partner at Orrick, a law firm, said the announcement reflected the growing scrutiny of technology companies in Washington.

As well as Mr Sessions’ upcoming meeting, next week the Federal Trade Commission is due to kick off months of hearings about the US economy, including whether antitrust enforcement of big technology groups needs to be tougher.

“[There’s] a recognition that the companies that have the largest market capitalisation and are driving platforms with which Americans interact every day probably are an appropriate focus of not only antitrust but political interest more broadly,” she said.

But David Kully, a former senior DOJ antitrust official, said the meeting did not necessarily mean that a formal investigation would follow and said he was “puzzled” by the announcement on Wednesday.

“If someone were to tell me that the DOJ or FTC were looking into antitrust issues with big tech companies, that alone wouldn’t surprise me. This step is just puzzling to me [as to] its purposes,” said Mr Kully, now an antitrust partner at Holland & Knight, the law firm. “Perhaps it really is just a brainstorming session,” he added.

Nevertheless, by the end of the day Twitter’s share price had fallen 6.1 per cent to $32.73, Facebook had dropped 2.3 per cent to $167.18 and Alphabet, the parent of Google, which drew criticism by declining its invitation to appear before senators, had dropped 1 per cent to $1199.10.

Jack Dorsey makes his mother proud

With a scruffy beard, a nose ring and no tie, Jack Dorsey was told by one senator that he did not look like a proper chief executive. “My mom would agree with you,” Mr Dorsey replied.

Sitting next to the poised and practised Sheryl Sandberg of Facebook, Mr Dorsey came across in the congressional hearing as refreshingly unrehearsed.

A Republican congressman, Billy Long from Missouri, tried to offer him a compliment: “A lot of people come in and they have all these mannerisms and they’ve practised with people telling them what to do. It’s obvious no one did that with you.”

Mr Dorsey clearly did have talking points. He read his opening remarks off an iPhone, posting them out on Twitter as he went. He repeated that Twitter’s number one priority is improving what he calls the health of conversations in its “public square”.

But he was also willing to admit his company’s problems.

Fred Upton, the Republican representative from Michigan, pressed him on whether Twitter’s rules were really clear. “I believe that if you went to the rules today and sat down with a cup of coffee, you would not be able to understand them,” Mr Dorsey said candidly.

When the seven hours of hearings were finally over, Mr Dorsey posted on Twitter a screengrab from his Apple watch showing spikes in his heart rate.

Marcia Dorsey, his mother, retweeted it with a heart emoji and the comment: “Ohhhh Jack . . . You did SO WELL.”

https://www.ft.com/content/c9aab32e-b168-11e8-8d14-6f049d06439c

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US hearings signal increased scrutiny of big tech

September 14, 2018

Federal Trade Commission looks into competition issues in the digital economy

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FTC hearings on ‘Competition and Consumer Protection in the 21st Century’ are set to run through to November © AP

By Kadhim Shubber in Washington

The Federal Trade Commission kicked off a marathon series of hearings on Thursday into competition and consumer protection issues in the latest sign of growing scrutiny of the digital economy by US policymakers and enforcers.

Joseph Simons, chairman of the commission, began the proceedings at Georgetown Law Center, a stone’s throw away from Congress, by warning against the introduction of ideology into antitrust policy and enforcement.

“In my view, basing antitrust policy and enforcement decisions on an ideological viewpoint (from either the left or the right) is a mistake,” he said. “I would rather make policy and enforcement decisions based on the best evidence and analysis.”

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On balance and on average, this does seem to add up to a reduction in competition, a reduction in dynamism, and one that I think we need to be concerned about

Jason Furman, the former chair of the Council of Economic Advisers in the Obama administration

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His comments came after Donald Trump ramped up his criticisms of technology groups. The US president has raised the question of antitrust action against technology and in August, he accused Facebook, Google and Twitter of suppressing rightwing viewpoints. He warned they were “treading on very, very troubled territory”.

The Department of Justice, which shares responsibility for antitrust enforcement with the FTC, said after Mr Trump’s comments that it would hold a summit with state prosecutors to discuss competition and free speech concerns about technology groups.

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The FTC hearings are modelled after a similar process it undertook in the mid-1990s to assess whether changes in the economy required it to take a new approach to antitrust enforcement and consumer protection. The hearings on “Competition and Consumer Protection in the 21st century” are set to run through to November.

On Thursday Mr Simons, who was nominated by Mr Trump in 2017 and confirmed this year, noted research that showed the US economy had become more concentrated and less competitive over the past 30 years. He also pointed to the renewed argument by progressive antitrust lawyers that the government should consider inequality and wages when enforcing competition rules.

“These concerns pose a challenge for antitrust agency leadership, the courts, and legislators: to think hard about whether significant adjustments to antitrust doctrine, enforcement decisions, and law would be beneficial to our country,” he said.

The debate has been driven by progressive think-tanks such as the Open Markets Institute and has posed an intellectual challenge to the antitrust consensus in place since the late 1980s, when the likes of Robert Bork argued that mergers should be assessed solely on the basis of consumer welfare, most typically framed in terms of prices.

In the first hearing on Thursday morning, Jason Furman, the former chair of the Council of Economic Advisers in the Obama administration, pointed to aggregate economic trends such as the fall in the share of income going to labour and the increase in mark-ups by companies.

“No single story comes out of this, but, on balance and on average, this does seem to add up to a reduction in competition, a reduction in dynamism, and one that I think we need to be concerned about,” he said.

However, Timothy Muris, the former FTC chairman and now senior counsel at Sidley Austin, warned of the “disastrous consequences” of returning to 1970s thinking.

In a later panel, on Thursday afternoon, Fiona Scott Morton, a professor of economics at Yale School of Management, referenced testimony in 2016 from Bill Baer, who then headed the justice department’s antitrust division, asking why the government was forced to litigate mergers that should “never have made it out of the boardroom”.

She said the swing of the pendulum away from antitrust enforcement had gone too far. “Obviously if you enforce less for 30 years in a row, you’re eventually going to pass the optimum,” she said. “It’s easy for me to see that we well overshot the optimum.”

Joshua Wright, a former FTC commissioner and now professor of law at George Mason University, disagreed, arguing that there was not enough detailed data about competition in the economy. “We know a lot less and probably need to know a lot more before playing much with policy,” he said.

Michael Kades, the director of markets and competition policy at the Washington Center for Equitable Growth, observed the panels on Thursday and said he hoped the FTC hearings would shine attention on new economic research, rather than becoming a forum for relitigating the battles of the past.

“Antitrust may have been wrong in the 1970s, that doesn’t mean it’s right in the 2000s,” he said.

https://www.ft.com/content/c2989f88-b799-11e8-bbc3-ccd7de085ffe

See also:

Republican anger boils over into political threat for big tech

Facebook to Start Fact-Checking Photos, Videos

September 14, 2018

The social-media company will use technology and human reviewers to help flag false content

Facebook will rely on technology and human reviewers for help in flagging false content on the social-media platform.
Facebook will rely on technology and human reviewers for help in flagging false content on the social-media platform. PHOTO: MARCIO JOSE SANCHEZ/ASSOCIATED PRESS
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Facebook Inc. FB -0.40% will begin fact-checking photographs and videos posted on the social media platform, seeking to close a gap that allowed Russian propagandists to promote false news during the last U.S. presidential election.

The company said Thursday it will use technology and human reviewers to try to staunch what it called in a statement “misinformation in these new visual formats.” Previously, the company’s efforts had been focused on rooting out false articles and links.

“The same false claim can appear as an article headline, as text over a photo or as audio in the background of a video,” Facebook product manager Tessa Lyons said in the statement. “In order to fight misinformation, we have to be able to fact-check it across all of these different content types.”

During the 2016 presidential election, a Russian group called the internet Research Agency helped its workers create graphics and videos that could spread misinformation via social media networks, according to special counsel Robert Mueller’s indictment earlier this year of three Russian companies and 13 citizens of the country.

Russian-linked group, for example, once altered a photograph of a woman carrying a sign at a pro-immigration rally in Arkansas. The original text on her sign said, “no human being is illegal” and the doctored photo said “give me more free shit.” It was posted to Facebook in August 2017, where it was liked or shared hundreds of times.

The Kremlin-backed Internet Research Agency, a.k.a. the Troll Factory, ​used fake social media accounts before and after the 2016 U.S. election to collect sensitive personal information on Americans, a Wall Street Journal investigation has found. Shelby Holliday explains how the Russian schemes worked.​

Yet, as with other technology companies, Facebook will face a significant challenge in designing algorithms that are able to catch doctored photographs and videos, or those that have been posted without context. A Facebook spokeswoman said the company’s efforts to fact-check video and photos will rely on technology but also human reviewers who work for groups certified by an organization called the International Fact-Checking Network.

The company is targeting video and photo content that has been “manipulated, taken out of context, or includes a false text or audio claim,” Ms. Lyons said in Facebook’s statement.

She acknowledged that “figuring out whether a manipulated photo or video is actually a piece of misinformation is more complicated; just because something is manipulated doesn’t mean it’s bad.” Ms. Lyons added the company can use technology “to identify different types of manipulations in photos, which can be a helpful signal that maybe something is worth having fact-checkers take a look at.”

In addition to technology, Facebook will rely on user feedback to help flag false content in videos and graphics, similar to what it does now with articles. The firm also examines comments on a post that might indicate misinformation and whether those sharing content have a history of sharing items rated false by fact-checkers.

Write to Micah Maidenberg at micah.maidenberg@wsj.com

https://www.wsj.com/articles/facebook-to-start-fact-checking-photos-videos-1536867288