Posts Tagged ‘Google’

White House Drafts Order To Look Into Google, Facebook Practices

September 22, 2018

The White House has drafted an executive order for President Donald Trump’s signature that would instruct federal antitrust and law enforcement agencies to open investigations into the business practices of Alphabet Inc.’s Google, Facebook Inc. and other social media companies.

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The order is in its preliminary stages and hasn’t yet been run past other government agencies, according to a White House official. Bloomberg News obtained a draft of the order.

The document instructs U.S. antitrust authorities to “thoroughly investigate whether any online platform has acted in violation of the antitrust laws.” It instructs other government agencies to recommend within a month after it’s signed actions that could potentially “protect competition among online platforms and address online platform bias.”

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The document doesn’t name any specific companies. If signed, the order would represent a significant escalation of Trump’s antipathy toward Google, Facebook, Twitter and other social media companies, whom he has publicly accused of silencing conservative voices and news sources online.

“Social Media is totally discriminating against Republican/Conservative voices,” Trump said on Twitter in August. “Speaking loudly and clearly for the Trump Administration, we won’t let that happen. They are closing down the opinions of many people on the RIGHT, while at the same time doing nothing to others.”

Social media companies have acknowledged in congressional hearings that their efforts to enforce prohibitions against online harassment have sometimes led to erroneous punishment of political figures on both the left and right, and that once discovered those mistakes have been corrected. They say there is no systematic effort to silence conservative voices.

Stiglitz Calls for Tougher Antitrust Stand to Fight Market Power

The draft order directs that any actions federal agencies take should be “consistent with other laws” — an apparent nod to concerns that it could threaten the traditional independence of U.S. law enforcement or conflict with the First Amendment, which protects political views from government regulation.

“Because of their critical role in American society, it is essential that American citizens are protected from anticompetitive acts by dominant online platforms,” the order says. It adds that consumer harm — a key measure in antitrust investigations– could come “through the exercise of bias.”

The order’s preliminary status is reflected in the text of the draft, which includes a note in red that the first section could be expanded “if necessary, to provide more detail on role of platforms and the importance of competition.”

The possibility of an executive order emerged as Attorney General Jeff Sessions prepares for a Sept. 25 briefing by state attorneys general who are already investigating the tech firms’ practices.

The meeting, which will include a representative of the Justice Department’s antitrust division, is intended to help Sessions decide if there’s a federal case to be made against the companies, two people familiar with the matter have said. At least one of the attorneys general participating in the meeting has indicated he seeks to break up the companies.

Growing movements on the right and left argue that companies including Google and Facebook engage in anticompetitive behavior. The companies reject the accusation, arguing they face robust competition and that many of their products are free. Bias has not typically figured in antitrust examinations.

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Jack Dorsey

In July, for instance, Twitter algorithms limited the visibility of some Republicans in profile searches. Jack Dorsey, the company’s chief executive officer, testified before Congress in September that the limits also affected some Democrats as the site tried to enforce policies against threats, hate, harassment or other forms of abusive speech. The moves were reversed.

Pew Research Center survey earlier this year found that 72 percent of Americans, and 85 percent of Republicans, think it’s likely that social media companies intentionally censor political viewpoints that those companies find objectionable.

Even on the right, however, there are misgivings about a Trump administration crackdown on the companies. On Friday, libertarian-leaning groups including FreedomWorks and the American Legislative Exchange Council sent a letter to Sessions expressing “fear” that his “inquiry will be to accomplish through intimidation what the First Amendment bars: interference with editorial judgment.”


Turkey cuts investment criteria for foreigners seeking citizenship (Needs the money)

September 19, 2018

Turkey on Wednesday made it easier for foreigners to become Turkish citizens by cutting the financial and investment criteria required for citizenship, according to a decree from President Recep Tayyip Erdogan.

Foreigners now need only to have $500,000 deposits in Turkish banks, down from $3 million before while fixed capital investment was reduced from $2 million to $500,000 dollars, the decree published in the Official Gazette said.

Foreigners now need only to have $500,000 deposits in Turkish banks. (File/AFP)

Meanwhile individuals can obtain citizenship if they employ 50 people, down from the previous 100, while those who own property worth $250,000 can become Turkish citizens, compared to the previous value necessary of $1 million.

The decree is the latest in a series by Erdogan in what appears to be a bid to prop up the embattled Turkish lira and the economy which slowed down in the second quarter.

Last week, the president ordered that contracts for the sale, rent and leasing of property in or indexed to foreign currencies would not be allowed.

The Turkish currency fell against the US dollar drastically in August after one of the most bitter spats between Ankara and Washington over the detention of an American pastor.

The lira lost nearly a quarter in value against the greenback in August.

But there had been investor concerns over domestic economic policy and Erdogan’s continued opposition to high interest rates, although the central bank aggressively hiked its main policy rate 6.25 percent to 24 percent last week.

Erdogan will later meet with representatives of American companies working in Turkey at 1500 GMT at his presidential palace in Ankara, according to the presidential website.

He will meet with 30 senior executives, according to HaberTurk daily, including representatives from Microsoft and Google.


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)


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.


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


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.”


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.”


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

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.

See also:

Republican anger boils over into political threat for big tech

Trump’s campaign manager calls Google a ‘threat to the republic’

September 13, 2018

Brad Parscale, Donald Trump’s campaign manager for the 2020 election, wants Congress to investigate Google following the leak of a video that showed the internet company’s top managers lamenting Trump’s election victory in 2016.

The video was recorded during one of Google’s weekly all hands meetings, known as TGIF meetings, and was leaked to the right-wing Breitbart news site on Wednesday.

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“Let’s face it, most people here are pretty upset and pretty sad because of the election…myself, as a immigrant and refugee I certainly find this election deeply offensive and I know many of you do too,” Google cofounder Sergey Brin is seen saying in the video.

The comments do not appear very different from other critical comments Brin and other Google executives have made following the election, particularly with regards to Trump’s inflammatory campaign rhetoric about immigration and other issues.

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“There is a lot of fear within Google,” CEO Sundar Pichai says in the video. “Many groups, women, blacks, people who are afraid based on religion, people who are afraid because they are not sure of their status, the LGBT community, and i could go on.”

But it’s no secret that many people on Google’s management team, and among the company’s workforce as well as many of those living in Northern California where Google is based, possess left-leaning politics. And the leaked video was quickly seized upon by associates of Trump, who have been leading a drumbeat of accusations about anti-conservative bias within the tech industry.

“Google needs to explain why this isn’t a threat to the republic,” tweeted Parscale, the manager of Trump’s 2020 election campaign.

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Brad Parscale

.@google needs to explain why this isn’t a threat to the Republic. Watch the video. Google believes they can shape your search results and videos to make you “have their values”. Open borders. Socialism. Medicare 4 all. Congressional hearings! Investigate …

4:55 PM – Sep 12, 2018

LEAKED VIDEO: Google Leadership’s Dismayed Reaction to Trump Election

Leaked footage shows Google’s leadership team – including its CEO and Co-founders – reaction to the election of Donald Trump. | Tech
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Google spokespeople were not immediately available for comment.

A conservative chorus alleging bias

Parscale’s tweet comes amid a full-scale attack by Trump and his allies on Google in the run up to the US mid-term elections. The President took to Twitter two weeks ago and accused Google of rigging search results as part of an effort to silence the voices of people with politically conservative views and to make him look bad.

Trump also alleged that Google had not promoted his state of the union addresses on its famous front door the same way the company had done for former US President Barack Obama. Google refuted the claim and provided evidence that it promoted Trump’s speeches before Congress in the same way as Obama’s.

And as with that claim, there does not appear to be any smoking gun evidence in the video of Google’s internal to back up claims of an anti-conservative bias.

Nowhere on the video does anyone appear to suggest that they can tweak search results so that they can influence people into adopting Google’s values. What most of the managers make clear is that they believe in the democratic system and in the rule of law.

“I’ve been a long-time Hillary (Clinton) supporter,” Ruth Porat, chief financial officer of Google-parent company Alphabet, told Google’s staff during the meeting. “But as Kent (Walker, senior vice president of Global Affairs) said, the most important thing is that I very much respect the outcome of the democratic process and who any one of us voted for is really not the point, because the values held dear at this company transcends politics.”

Sundar Pichai

Google CEO Sundar Pichai at the 2018 Google I/O developer conference.
Greg Sandoval/Business Insider
Google CEO Pichai told his staff that the election reaffirmed his faith in the democratic process.

“It’s important to remember we are in a democratic system,” Pichai said. “It’s heartening to see the proper transition of power… (democracy) tends to make it through ok, and it seems to be better than any other system out there.”

The leaked video violates a Google taboo and is a sign of the turmoil within the company

The fact that a video of the weekly TGIF meeting was leaked underscores the increasingly tumultuous and politicized nature of various factions within the company. The TGIF meetings, in which senior management respond to questions from the staff, is one of Google’s most longstanding and sacrosanct traditions – disclosing what is said in these meetings has long been considered taboo.

Conservative employees at Google rallied around James Damore last year, after he questioned the company’s diversity policies. And on the opposite end of the spectrum, a number of Google insiders have protested the company’s involvement with the military.

As part of a program called Project Maven, Google supplied the US Department of Defense with artificial-intelligence technology that helped analyze drone video footage. That caused an internal revolt that resulted in multiple news leaks, including at least one regarding comments made by managers at all-hands meeting.

Previously, employees who opposed Googles relationship with the military presumably held liberal political views. This time, it appears that those who supplied the video to Breitbart are much more politically conservative.


European Parliament approves controversial new copyright law in blow to tech firms

September 12, 2018

An alliance of tech giants and internet activists lost a battle against content creators seeking more protection for their work. The vote by European lawmakers to reform EU copyright law could redefine internet freedom.

Music apps

A multi-year battle that saw media organizations and creative individuals seeking content protection face off against against big tech and internet-freedom activists came to a head in Strasbourg on Wednesday, when the European Parliament voted to update copyright legislation for the age of content-sharing platforms.

MEPs voted 438-226 with 39 abstentions in favor of the EU Copyright Directive that is set to give more power to artists, news and traditional media companies as opposed to tech giants like Facebook, Microsoft and Google.

“This is a good sign for Europe’s creative industry,” said German MEP Axel Voss, who helped move the bill along through parliament.

MEPs voted on a range of conflicting amendments prior to the vote, making the make-up of the final draft law not immediately clear.

Two contentious articles

Two contentious proposals were at the heart of the drama: Article 11, which covers the rights of press publishers, would see newspapers, magazines and other such agencies receive a fee when content platforms link to their stories, so-called “neighboring rights”; and Article 13, which would hold content distributors like YouTube liable for copyright infringement committed on their platforms, an attempt to ensure content producers don’t get ripped off.

The law’s critics fear that Article 11 will be unworkable and Article 13 could lead to “upload filters,” or algorithms that would give tech giants control over what content appears on their platform, effectively censoring information. They warn that overly cautious algorithms could also ban content even when it does not breach copyright law, known as “overblocking.” They also warn of the cost that such a requirement would have for smaller publishing platforms.

Internet activists additionally worry that if the directive were to go through in its unaltered form, it would run counter to the web’s founding principles of free-flowing information —  and, as the rap artist Wyclef Jean suggests, make it harder for people to find new culture and talent.

Artists on both sides

Since it was first proposed in 2016, the copyright directive has become a battleground for artists. Many want to stop internet platforms from freely hosting their content, and internet activists, who fear the vaguely worded rules will crush freedom of expression on the internet.

Jean, a former member of American hip-hop group The Fugees, was present in Strasbourg on Tuesday ahead of the vote. As a musician, he unusually stands on the side of the tech giants and internet activists in the fractious debate that has generally pitched the tech giants against media organizations and artists.

“I’ve worked with so many young artists … who have sampled my music and succeeded,” Jean said in a press briefing on EU copyright at the European Parliament on Tuesday. “Upload filters or anything else that restricts this will stop artists from making and creating the future.”

Jean-Claude Moreau, chairman of the Society of Authors, Composers and Publishers of Music, which supports the reform, said artists would “prefer no directive to a bad directive.”

“Freedom means we have to respect also the authors … because the creators must [make] a living off their works,” Moreau said at a protest outside the European Parliament on Tuesday.

“We want the internet to be an accelerator, not a brake,” he added.

Former Beatles musician Paul McCartney has also been an outspoken supporter of the copyright reform, highlighting the “value gap… between the value these platforms derive from music and the value they pay creators.”

Last minute amendments

On Wednesday, more than 200 amendments to the bill were discussed in a flurry of effort to find compromise between the demands of content creators and the rights of users.

“I think last time most members rejected the proposal because they were convinced Article 13 is bad and that it’s not a good idea to scan content prior to the upload,” said Tiemo Wölken, a German member of the European Parliament, who brought forth his own amendments.

“My idea is to say if a platform is performing actively — so, organizing and optimizing content to earn money — they are liable,” Wölken said. “And, if a right holder requests to conclude a license agreement with the platform, the platform has to enter into a fair an appropriate licensing agreement.”

Before existing copyright laws can be updated, however, the approved copyright law bill will now pass for approval to the European Commission, the EU’s executive arm, and the leaders of the EU’s 28-member states.

Tech Investors Prepare to Say Goodbye to Facebook, Google

September 12, 2018

New S&P 500 communication-services sector will include companies currently in the tech, consumer-discretionary sectors

The new communication-services sector in the S&P 500 will include companies previously in the tech sector such as Facebook.
The new communication-services sector in the S&P 500 will include companies previously in the tech sector such as Facebook. PHOTO: MATT ROURKE/ASSOCIATED PRESS

The S&P 500 is getting a refresh later this month that may prove market moving as it plays out.

Index providers S&P Dow Jones Indices and MSCI are officially creating a new communication-services sector to replace telecom, the smallest of the index’s 11 segments. S&P will complete its reclassification Sept. 21, and many others who use the classifications will do so by Sept. 28. Some companies that are currently in the tech and consumer-discretionary sectors will move into the communication group.

As part of this shift, providers of exchange-traded funds need to rebalance the stocks in their sector ETFs while selling the stocks that are moving to new sectors. Facebook Inc., for example, now comprises 5.8% of State Street’s $23 billion Technology Select Sector SPDR ETF but will have to be sold as the social media giant moves into the communication-services sector.

The Communication Services Select Sector SPDR ETF that State Street launched in June to track the new sector has nearly 18% of its assets in Facebook. But it has a comparably small $500 million in assets right now. State Street said it believes the ETF will gather more assets as the reclassification gets closer because investors will want to avoid throwing their portfolios out of whack. But right now, the communication ETF currently holds fewer Facebook shares than the tech ETF will need to sell.

State Street’s funds will be rebalanced, effective after the closing bell Sept. 21. Vanguard began reweighting its funds in the second quarter. As ETF providers and other investors rearrange their holdings, it could move stock prices, some analysts say, though it isn’t clear exactly how this will play out.

“Around the time this occurs, there could be some dislocations depending on how investors are rebalancing their own portfolios,” said Brian Hayes, a quantitative analyst at Morgan Stanley.

For one indicator of how this could affect the market, look to the recent past. Since late July, companies that are staying in the tech sector, like Apple Inc. and Microsoft Inc., have outperformed those leaving, such as Facebook and Google parent Alphabet Inc., according to Morgan Stanley. Amazon, which is staying in the consumer-discretionary sector, has outperformed Netflix Inc., which is leaving.

Many of those moves have been due to idiosyncratic factors, such as Facebook’s earnings results that disappointed investors in late July. But as the reclassification gets closer, performance of these stocks could start to diverge further.

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Write to Ben Eisen at