Posts Tagged ‘Google’

Vietnam set to tighten clamps on Facebook and Google, threatening dissidents

May 19, 2018

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A struggle over internet laws in Vietnam is pitting a government keen on maintaining tight control against U.S. technology companies trying to fight off onerous new rules – with the country’s online dissidents among the biggest losers.

The latest conflict centers on new cybersecurity legislation set for a vote by Vietnamese lawmakers later this month. It aims to impose new legal requirements on internet companies, and hardens policing of online dissent.


By Mai Nguyen and Jonathan Weber


Facebook, Google and other global companies are pushing back hard against provisions that would require them to store data on Vietnamese users locally and open offices in the country. But they have not taken the same tough stance on parts of the proposed law that would bolster the government’s crackdown on online political activism.

Vietnam offers a case study in the conflicting pressures the likes of Facebook and Google confront when operating in countries with repressive governments. It also shows how authoritarian regimes try to walk a line in controlling online information and suppressing political activism without crippling the digital economy.

Such tensions are playing out across Southeast Asia, where the enormous popularity of Facebook and Google has created lucrative business opportunities and outlets for political dissent. With that, though, has come both government censorship and a way to get propaganda to large audiences efficiently.

The region is particularly important for Facebook and Google because most Internet users in China are blocked from accessing them.

An industry group called the Asia Internet Coalition (AIC) is leading efforts to soften the proposed cyber law in Vietnam. Jeff Paine, managing director of the AIC, said he and others were able to raise concerns about the law directly with Vietnamese Prime Minister Nguyen Xuan Phuc and other top government officials when they visited Singapore last month.

The discussions took place as part of a seminar about internet issues that included academics, industry officials and the high-level Vietnamese delegation, according to Paine. He said there was “a healthy dialogue” that focused mostly on how Vietnam can leverage the next stages of the digital revolution.

But he said there was no discussion of content restrictions.

The Vietnamese government did not respond to a request from Reuters for comment for this article.

Political activists in Vietnam rely on social media to rally support, and the new cyber law comes on the heels of an April letter from more than 50 rights groups and activists to Facebook Chief Executive Mark Zuckerberg accusing the company of working too closely with the Vietnamese government to stifle dissent.

Facebook and Google say they have to abide by local laws in the countries where they operate.

Facebook’s latest “transparency report,” released Tuesday, shows that in the second half of last year, the company began blocking content in Vietnam for violations of local law for the first time. The company reported 22 such instances – though it said they were prompted by “private reports of defamation” rather than direct government requests.

Google last year also blocked YouTube videos at the request of the government for the first time. Updated figures released Friday show the company was asked to remove more than 6500 videos in 2017, mostly for criticizing the government, and that it complied with a majority of the requests.

The transparency reports do show that the companies don’t automatically do the bidding of the government. Facebook said it had received 12 government requests for Facebook user account data in 2017 and complied with only 4 of them, all of which were “emergency” requests. The company defines an emergency as involving “imminent risk of serious physical injury or death.”

In cases where content is alleged to violate local law, both companies say takedown requests are subject to legal review, and when they comply the material is only blocked locally.

Direct government censorship requests don’t tell the whole story though.

Facebook also removes content and blocks accounts for violating its own global “community standards,” which bar material and behaviors ranging from posting pornography to hate speech and inciting violence.

“The first thing we do when a government tells us about content that violates laws is we look at whether it violates our standards,” said Monika Bickert, Facebook’s vice president of global policy management. The company this week began providing data on community standards violations but does not break it down by country.

“My account was blocked for 8 months,” said Le Van Dung, an independent journalist in Vietnam who signed the letter to Zuckerberg. “I sent letters to Facebook management for months but there’s only an automatic reply saying they have completed your request.”

His account was restored last month, the day after the appeal to Zuckerberg was sent, he said.

Facebook said Dung’s account was correctly removed for violating community standards provisions barring “spam” activities and was restored by mistake. Dung denies engaging in spam. He did, though, have more than one account. Multiple accounts are not allowed on Facebook and fall within the company’s definition of spam behavior.

Rights activist Le Van Dung live streams on Facebook in a coffee shop in Hanoi


Vietnam has had tough internet regulations in place since 2013. They ban any postings that are anti-government, harm national security, cause “hatred and conflicts” or “hurt the prestige of organizations and individuals.”

The rules also ban social media users who “spread fake or untruthful information.”

New rules implemented in 2017 tightened the screws further. One turning point, according to Yee Chung Seck, an attorney in the Ho Chi Minh City office of the international law firm Baker McKenzie, was an April 2017 meeting convened by the government to discuss a range of Internet ills including disinformation, hate speech and bullying.

That came just after the government called on all companies doing business in the country to stop advertising on YouTube, Facebook and other social media until they found a way to halt the publication of “toxic” anti-government information.

Yet another decree implemented last month stated that social media platforms had to remove illegal content within three hours of it being reported by the government, though Paine said the rule applies only to domestic companies.

Still, Facebook and Google don’t seem to be under any imminent threat given how deeply they have penetrated into Vietnam society.

About 55 million of Vietnam’s 96 million people are regular social media users, according to research by Simon Kemp, a digital media consultant based in Singapore.

Facebook, YouTube and Google Search are far and away the most popular internet destinations, Kemp’s data shows. Facebook is also the most popular platform for online shopping in Vietnam.

And the government is eager to nurture the country’s digital economy: smartphones and all that they enable, especially e-commerce and online banking, are transforming economies across Asia, and no one wants to be left behind.

“They love that part of the story,” said Chung.

But the government also wants more control, including local data storage and local corporate offices – a provision company officials privately fear is designed to allow the government to intimidate companies by exposing individuals to arrest.

Both Facebook and Google serve Vietnam from their regional headquarters in Singapore.

The new law also gives more power to Vietnam’s Ministry of Public Security, which is tasked with crushing dissent in the communist-ruled country.

Facebook said it expected the new rules would require it to restrict more content. Google declined to comment.



For the rights activists, there appears to be little hope of relief.

For example, just this month, a Facebook user in Vietnam was sentenced to four-and-a-half years in jail for posts which “distorted the political situation,” according to a statement posted on an official Communist Party website.

Still, Facebook remains an important tool for activists in Vietnam – a country where government criticism is rarely tolerated and the battle between the authorities and dissidents is a game of cat-and-mouse.

“Sometimes we use Facebook to distract authorities, like we pretend to discuss an important meeting, which obviously won’t happen,” activist Nguyen Lan Thang said. “Then we watch from afar and laugh as they surround our fake meeting spot,” Thang added.


(Additional reporting by James Pearson; Editing by Martin Howell)


Google Shares Fall Ahead of 60 Minutes Feature on Antitrust Threat

May 18, 2018

The CBS news magazine 60 Minutes will lead its show Sunday with a segment on “The Power of Google,” and promises to talk to the company’s critics, who say it stifles competition, as well as the European Union’s antitrust chief.

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Shares in Google’s parent company, Alphabet Inc., dipped about 1.7 percent in early trading Friday after the news was announced. The stock was trading down 1 percent to $1070.02 9:47 a.m. in New York.

Google, along with other U.S. tech giants like Facebook Inc., Apple Inc. and Inc., have come under scrutiny in recent months for becoming too big, and too dominant in many aspects of people’s daily lives. Google and Facebook for instance largely control the market for online advertising, fueled by information they collect on their billions of users, which feeds their bottom lines and has made them among the world’s most profitable companies.

More from China Casts Doubt on Report of $200 Billion Trade Deficit Offer

Facebook Chief Executive Officer Mark Zuckerberg appeared for two days before Congress earlier this year to respond to questions about how the social-media company collects data and how it protects users’ privacy. Google probably collects even more data, and some lawmakers are calling for its CEO, Sundar Pichai, to come to Washington to answer questions.

Margrethe Vestager, the EU competition commissioner, will be interviewed on the 60 Minutes segment, her office said Friday. Vestager fined Google a record $2.7 billion last year over its shopping search service. The Mountain View, California-based company faces possible further fines in two separate EU probes into Android mobile phone software and Google’s online advertising contracts.

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In the U.S., meanwhile, Google faces scrutiny from Missouri’s Republican Attorney General Josh Hawley, who isinvestigating the company for possible violations of the state’s antitrust and consumer protection laws.

Google didn’t immediately respond to a request for comment about the show.

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Google probed in Australia for allegedly tracking phone users at their expense

May 15, 2018
Australian authorities launched an investigation into Google’s massive data harvest from smartphones, which reportedly allows the search giant to track users’ movements even with location services turned off.

The investigations stem from findings made by the California-based software company Oracle, which revealed that Google was collecting up to one gigabyte of each users’ monthly phone data to secretly trace their location.

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Apple’s Tim Cook urges Duke graduates to think hard about data privacy — “Technology Shouldn’t Mean Trading Away Your Privacy”

May 15, 2018

Lingering concerns about data privacy practices among American tech firms came up again at the Duke graduation as Apple’s Tim Cook took some veiled shots at Facebook and Google on privacy….

During a commencement address to Duke University Sunday, Apple CEO Tim Cook used some well-known platitudes, telling the students to make brave choices, rise to challenges and be unafraid to break with conventional wisdom.

He also appeared take yet another jab at Facebook and its handling of user data.

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“We reject the excuse that getting the most out of technology means trading away your right to privacy,” Cook said. “So we choose a different path, collecting as little of your data as possible, being thoughtful and respectful when it’s in our care because we know it belongs to you.”

The comment echoed Cook’s earlier criticism of Facebook, which has endured months of criticism after it was revealed that a political data analytics firm, Cambridge Analytica, was able to harvest data for nearly 90 million Facebook users.

“I wouldn’t be in this situation,” Cook told reporters from Recode and MSNBC in March.

Related: Mark Zuckerberg hits back at Tim Cook

“The truth is, we could make a ton of money if we monetized our customer — if our customer was our product,” he said. “We’ve elected not to do that.”

Cook also called for increased regulation of social media and questioned whether Facebook should monetize user data on its free platforms by selling targeted ads.

Facebook CEO Mark Zuckerberg shot back at Cook in an interview published by Vox last month.

“You know, I find that argument, that if you’re not paying that somehow we can’t care about you, to be extremely glib. And not at all aligned with the truth,” Zuckerberg told Vox.

Cook on Sunday again aimed to paint Apple’s (AAPL) handling of user data in stark contrast with Facebook’s. He credited Apple co-founder Steve Jobs with instilling within the company the drive to do things better.

“In every way at every turn, the question we ask ourselves is not, ‘What can we do?’, but ‘What should we do?” Cook said. “Because Steve taught us that’s how change happens, and from him I learned to never be content with the way that things are.”

Apple has had a few tangles with privacy issues as well.

Related: Tim Cook disses Amazon second headquarters search

The company caught flack when it announced in February a plan to move iCloud accounts registered in mainland China to state-run Chinese servers. Apple made the move after it unsuccessfully fought to be exempt from a controversial new cybersecurity law in the Asian nation, but the decision alarmed privacy advocates.

And in 2014, hackers were able to steal nude photos from celebrities’ iCloud accounts.

After that, Apple committed to increased transparency, and the company encrypted iPhones to make it more difficult for anyone — even authorities — to get their hands on data.

Cook, who often weighs in on social issues, also used his platform at Duke University to praise the “fearless” women who have spoken out in the #MeToo movement, the Parkland student advocating for tighter gun control, and people who “fight for the rights of immigrants.”

— CNN’s Sherisse Pham, David Goldman and Seth Fiegerman contributed to this report.

Includes video:

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In Jab At Facebook & Google, Tim Cook Tells Duke Grads “Technology Shouldn’t Mean Trading Away Your Privacy”


Europe’s antitrust cop, Margrethe Vestager, has Facebook and Google in her crosshairs

May 13, 2018

Regulators are looking closely at how technology companies harness vast troves of data to enrich themselves, quash competition and exert control over their users. Not to mention “fake news.”

“I think they are wrong in believing that data must have all the characteristics of cash.”

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The Washington Post
May 12 at 7:40 PM

Margrethe Vestager is an avid Twitter user who likes to post photos of flowers and cityscapes from her native Denmark.

Her account is also a means of tracking her travels as Europe’s chief antitrust cop and a scourge of big technology companies. Here she is at the European Parliament. Here she is speaking in Washington and at Harvard and delivering a Ted talk in New York. Here she is imposing a $2.9 billion fine on Google for “abusing its search dominance.” And slapping Facebook with a fine for “wrong/misleading information when it took over WhatsApp.” And threatening higher taxes for Apple and other digital companies that do business in Europe.

Vestager was scrutinizing tech companies long before the latest scandals about Russian election interference through social media and misuse of data by Cambridge Analytica. But she said those episodes “changed the context very much.”

“Just as there is a wonderful side to big data in a variety of different kinds and ways, there is a dark side to it as well,” she said in an interview. “And I think that has been much more obvious.”

The disclosure that Cambridge Analytica deployed personal data from millions of Facebook users, without their permission, in the service of Donald Trump’s presidential campaign has fueled privacy concerns most prominently. Vestager said that, as a consumer, she worries about data privacy, too.

But she and other regulators are also looking closely at how technology companies harness vast troves of data to enrich themselves, quash competition and exert control over their users.

The value of data is skyrocketing: For example, Facebook made $11.8 billion on advertising in the first three months of 2018, up 50 percent from the same period a year earlier.

Competition watchdogs have often viewed the privacy concerns surrounding data and technology as unworthy of their full regulatory firepower. Yet as more value is ascribed to peoples’ information, that is starting to change.

Germany’s Federal Cartel Office is investigating whether Facebook abused its dominant position to force users to accept its terms and conditions and hand over information that the company then sold to advertisers. The case is limited to a single country. But the outcome could set a model for others to follow.

“The issues are not clear, at least not yet,” Vestager said. “We follow with interest what the Germans are doing in the space between competition law enforcement and privacy.”

Growing European frustrations with technology companies, many of which are American, were evidenced by the European Parliament’s endorsement last month of a nonbinding report that advocated breaking up Google. Vestager said a breakup is “not very much my preoccupation.”

But many European analysts agree that data concerns could evolve into other competition concerns.

“Data has such an economic value. It’s sometimes characterized as the raw materials of the new economy,” said Christopher Kuner, co-chair of the Brussels Privacy Hub at the Free University of Brussels, who said he has watched his students seek to bring together privacy and antitrust issues in novel ways.

“It’s hard to see how this wouldn’t become more important in the future. There seems to be growing concern about the market power of digital services,” he said.

The European Commission already reviews whether companies that are merging could bring together a volume of data that would close the market to competitors. Vestager said she has also directed members of her team to explore whether control over data could create a violation of antitrust law more broadly.

Antitrust regulators face a range of challenges in taking on data concerns. It can be hard to assign a value to data. Some can easily be shared or copied. And the economic value of some user information can be fleeting: News Corp. bought the social networking site MySpace for $580 million in 2005, only to sell it for $35 million six years later.

Vestager said she sometimes doubted the value of the targeted advertising that drives much of the companies’ business. Her ­pixie-cut hair is unapologetically salt and pepper, but, she said, “I get a lot of advertising on how to cover your gray hair. So obviously they don’t know that I wear it with pride.”

She said that her job, however, is to keep watch over the industry, no matter the effectiveness of its advertising.

This month, a broad new set of privacy regulations will go into effect in the European Union, forcing companies to hand over far more control of personal data to the 500 million consumers of the bloc. Facebook chief executive Mark Zuckerberg has said that U.S. Facebook users will also be granted some of those increased controls.

In congressional hearings with Zuckerberg last month, lawmakers appeared to be considering imposing new regulations on the way Facebook and other Internet giants use their users’ information.

But, so far, U.S. antitrust regulators have been cautious about getting involved in what they say is an evolving market for privacy. Some have said they are worried that too much regulation could stifle innovation — and they say that as consumer attitudes change about how much value to place in privacy, regulators should stand aside unless there are clear market abuses.

“The mentality regarding free platforms may well be changing. I know that for me, it has changed,” said Makan Delrahim, the assistant attorney general for the Justice Department’s antitrust division, in a speechlast month. “Antitrust enforcers may need to take a close look to see whether competition is suffering and consumers are losing out on new innovations as a result of misdeeds by a monopoly incumbent.”

Many Europeans are skeptical of the cautious U.S. approach.

“Data is itself valuable, and people give it in exchange for services,” said Alec Burnside, a lawyer at the Dechert law firm in Brussels who has taken part in antitrust complaints against Google. “I think they are wrong in believing that data must have all the characteristics of cash.”

Quentin Ariès contributed to this report.

AT&T’s Top Washington Official Out Over Hiring of Trump’s Lawyer

May 11, 2018

Robert Quinn retiring after what company calls ‘big mistake’ — AT&T paid Cohen up to $600,000 for insights on Trump

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Michael Cohen

AT&T Inc. said its Washington policy chief is leaving the company in a shakeup of one of Washington’s biggest corporate lobbying operations after the “big mistake” of hiring President Donald Trump’s personal lawyer, Michael Cohen.

“Our company has been in the headlines for all the wrong reasons these last few days and our reputation has been damaged,” Chief Executive Officer Randall Stephenson said in a memo to employees. “There is no other way to say it – AT&T hiring Michael Cohen as a political consultant was a big mistake.”

AT&T veteran Robert Quinn is retiring after less than two years as senior executive vice president of External & Legislative Affairs, the company announced Friday.

“Our Washington D.C. team’s vetting process clearly failed, and I take responsibility for that,” Stephenson said in his memo.

Quinn’s departure was announced after the relationship with the Cohen came to light on Tuesday, when AT&T was cited by attorney Michael Avenatti as one of the parties that made payments to Cohen’s firm. Avenatti is representing Stephanie Clifford, the porn actress known as Stormy Daniels, who was paid $130,000 by Cohen just before the election not to discuss an alleged tryst with Trump.

Quinn has been in charge of AT&T’s Washington lobbying since October 2016 after a long association with the company, including when it hired Cohen for a year-long contract that ended in December 2017. It said it hired him to help with its proposed $85 billion merger with Time Warner Inc. and other regulatory and policy issues. In November, AT&T provided information about Cohen to Robert Mueller, the special counsel investigating Russian interference in the 2016 presidential election.

At the time that AT&T engaged Cohen, it wasn’t aware of “the current controversy surrounding Cohen,” AT&T said in an internal email to employees this week.

AT&T spent almost $17 million last year, more than any single corporation except Google parent Alphabet Inc.according to the Center for Responsive Politics, a Washington-based group that tracks money in politics. It employed 96 lobbyists in the first quarter of 2018, including 17 on its payroll and the rest at some of Washington’s most prominent firms.

Before rising to AT&T’s top Washington job in October 2016, Quinn was in charge of federal regulatory affairs. He started as an operator for Illinois Bell in 1980 before going to law school and returning to the company as an attorney in 1993. He has represented AT&T at both the Federal Communications Commission and the U.S Department of Justice.

The External & Legislative Affairs group that Quinn headed will report to AT&T General Counsel David McAtee, Stephenson said in the memo.



Murdoch’s News Corp to take aim at Google and Facebook

May 3, 2018

Google and Facebook are bracing for a fresh attack from the nation’s largest media company, Rupert Murdoch’s News Corp, which is expected to intensify its criticism of the digital duopoly for undermining traditional publishers.

News Corp will use a submission to the competition watchdog review to put further pressure on Google and Facebook, who are under fire globally for failing to stem the spread of fake news and for recent privacy breaches.

By Jennifer Duke & John McDuling
Sydney Morning Herald
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Facebook prduced another stellar earnings report in the first quarter, despite facing its biggest challenge ever from a major data breach scandal.

Submissions to the Australian Competition and Consumer Commission inquiry on the dominance of digital giants are expected to be released by the end of the week with Fairfax Media and Nine Entertainment Co also expected to participate.

Sources familiar with News Corp’s submission describe it as lengthy, strongly worded and aggressive.

News Corp controls pay TV group Foxtel, and owns a string of Australian newspapers including Sydney’s Daily Telegraph, Melbourne’s Herald Sun and The Australian.

News Corp has waged a long campaign against Google and Facebook in recent years, arguing the two digital giants are unregulated, and profit from journalism without paying for it.

As recently as January, News Corp figurehead and executive chairman Rupert Murdoch called for “carriage fees” to be imposed on the digital giants.

Such a proposal would be a similar arrangement to the US pay TV industry, where distributors such as cable providers Comcast and Time Warner Cable pay content creators like Murdoch’s Fox News to air their channels.

“The publishers are obviously enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services,” Mr Murdoch said in January.

The News Corp executive chairman’s comments were in response to an announcement by Facebook that it would reduce the amount of news in a user’s feed, in favour of content from friends and family.

News Corp chief executive Robert Thomson has also persistently criticised Google and Facebook, describing them as dyfunctional and calling on them to share revenue with publishers.

US digital giants are fearful of being regulated like media companies. Google and Facebook used their submissions to the ACCC earlier this month to defend their role in the media.

Fairfax Media (publisher of The Sydney Morning Herald and The Age) recently struck an advertising deal with Google.

In its own submission, it made a distinction between Google and other digital platforms. Fairfax said it had made “less progress” commercially with Facebook.

Despite an “exceptionally challenging” environment for journalism, Fairfax warns that asking the digital giants to pay for content, or for targeted taxes to subsidise public-interest journalism, was “impractical” and potentially risked editorial independence.

Fairfax described the role of digital platforms as “not entirely dissimilar” to the role of publishers and recommended that they should be “responsible for the content they amplify and distribute”.

The digital platforms have been increasingly uncomfortable about claims they are media companies rather than tech companies, with Facebook and Google regularly distancing themselves from the role of a publisher.


News Corp leads charge against tech giants in Australia probe — 57 media companies, advertisers and journalist groups join together

May 3, 2018

Rupert Murdoch’s News Corporation accused Facebook and Google of “anti-competitive practices” in one of dozens of submissions to a probe of the tech giants released Thursday by Australia’s competition watchdog.

© AFP/File | Australian media groups argue that Facebook and Google’s dominance of digital advertising significantly undermined the news industry

A total of 57 media companies, advertisers and journalist groups put forward their cases for changes in the operations of the internet titans, the Australian Competition and Consumer Commission (ACCC) reported.

News Corp, the country’s main newspaper group, its main competitor Fairfax Media and commercial broadcasters led the charge in arguing that Facebook and Google’s dominance of digital advertising significantly undermined the news industry.

“A number of digital platforms possess substantial market power and are engaging in anti-competitive practices that prevent publishers such as News Corp Australia from competing on the merits,” the company said in a 144-page submission.

“These practices have the potential to profoundly damage the creation, distribution and consumption of news and journalism in Australia.”

Murdoch and other executives from the company, which also owns The Wall Street Journal and the Times of London, have long led calls for Facebook and Google to “level the playing field” and pay news companies for their content.

But The Australian newspaper said the ACCC submission, by alleging market abuses by the two companies, “represents a dramatic escalation of hostilities”.

The group stopped short of demanding regulation of Facebook and Google, saying “current laws may be sufficient to deal with our concerns”.

“However, it may also be the case that some further legislative, regulatory and/or policy intervention or changes are required.”

Fairfax complained that its main mastheads had seen their advertising revenue fall from Aus$800 million (US$600 million) in 1999 to just Aus$225 million (US$169m) in 2017 as Google and Facebook gobbled up digital advertising dollars. As a result, the group has shed hundreds of jobs.

But it also stopped short of demanding new regulations, saying this should be “a last resort”, and argued instead for the digital platforms to work collaboratively on solutions for the news media.

Distancing itself from News Corp, Fairfax also opposed making platforms pay for news content, saying this would be “impractical” and post risks for editorial independence.

Australia’s main television broadcasters — Seven, Nine and Ten — demanded some combination of revenue sharing and tighter regulation of the tech companies’ advertising activities.

“The ACCC must intervene to ensure that the competition for advertising revenue is occurring in a fair and effective manner,” said the Ten Network, recently purchased by US broadcaster CBS.

In its own submission to the ACCC made public last month, Facebook opposed calls for tighter regulation, saying the rapidly changing digital landscape made the platforms “a challenging subject for regulatory intervention”.

“Consumers often have the most to gain from market disruptions caused by technological change and the most to lose from interventions that are designed to protect particular business models from the effects of those changes,” it said.

Google added in its submission that “changes in consumer and marketing behaviour have profound implications for traditional news business models. But they do not mean the death of journalism.”

The competition commission is expected to publish a preliminary report in December, and a final report next year.

© 2018 AFP



China prepares tech sector for battle as US trade team arrives

May 2, 2018

The first salvos in the budding US-China trade conflict struck old-school sectors like steel and agriculture, but Beijing is now bracing for moves against its strategic ambitions in hi-tech.

© GETTY IMAGES NORTH AMERICA/AFP / by Ryan MCMORROW | Microchips are among China’s biggest imports, rivalling oil, and have become a stark reminder of its dependence on US technology


As a US trade delegation heads to Beijing for talks starting Thursday, China’s race to catch up to the United States in technology looms large.

The skirmish is taking place upstream of the consumer applications made by tech giants like Google and Facebook or Alibaba and Tencent, and focusing on semiconductors, the critical building blocks of electronics.

Semiconductors, or computer chips, are the brains of electronic devices, enabling them to run programmes and store memory.

Most are made by US giants such as Intel, Qualcomm and Micron, which have decades of experience developing the integrated circuits, as well as manufacturers in US allies South Korea and Taiwan.

Chips are among China’s biggest imports, rivalling oil, and have become a stark reminder of its dependence on American technology.

Last month, Washington banned Chinese telecom and smartphone giant ZTE from purchasing crucial US components for seven years, threatening its survival, as punishment for breaking US export controls.

The US has also reportedly opened a similar probe into another Chinese telecom major, Huawei.

Both companies depend on US chips to build their gadgets and equipment, reinforcing for Beijing the need to control every piece of the technological supply chain.

China must rely on itself for core technologies, President Xi Jinping told scientists when visiting an IT firm last week.

– China can do ‘big things’ –

“In the past we had no choice but to rely on our own efforts. Back then we even created two atomic bombs and launched a satellite while tightening our belt and gritting our teeth,” he said.

China’s advantages, he said, include being able to “gather our strength to do big things”.

And that is what concerns Washington.

China’s marshalling of industrial policy to catch up in semiconductors and other technologies figures prominently in the Trump Administration’s findings against Beijing in an investigation that has led to proposed tariffs on tens of billions of dollars in Chinese goods.

The Trade Representative probe looked at Beijing’s intellectual property practices and innovation policies, with a subsequent report taking aim at its “Made in China 2025” programme, which is designed to spring China from a maker of sports shoes and denims into high-tech goods.

China relies on foreign imports for 80 percent of its chips, which Beijing intends to change.

To get there, central and local governments have sunk roughly $100 billion into building its semiconductor industry since 2014, the US report said.

About $20 billion has been funnelled through the China Integrated Circuit Industry Investment Fund. After the export ban against ZTE was announced, officials in Beijing confirmed they were mustering investment for a second national fund.

One firm to benefit recently was Hua Hong Semiconductor, a state-controlled company listed in Hong Kong that in January received a major investment from the state chip fund, with which building a $2.5 billion chip factory in the eastern city of Wuxi.

– Long way to go –

Hua Hong benefits from a lower tax rate and said in filings it expects its Wuxi venture to receive plentiful debt financing from Chinese banks, along with land subsidies and help recruiting talent from the city.

The project is just one of the fund’s more than 50 investments, with cash pouring into chip designers, new factories, and testing and materials firms across China, according to corporate records.

Before boarding a plane for talks in China, US Commerce Secretary Wilbur Ross called the plan “frightening”, and noted the trade deficit was in part “inspired by evil practices”.

Washington has blocked several attempts by Chinese firms to buy up American semiconductor companies.

But even with the large outlays, China remains behind in the semiconductor race, analysts say.

“It will take many, many years for those kinds of investments to make progress,” said Cao Cong, an expert in China’s science policy at the University of Nottingham’s campus in Ningbo, noting state-led efforts may be less effective for semiconductors.

China can direct state-owned enterprises to make purchases of the large aircraft and high-speed trains it builds, Cao said, but the consumer is the end user for semiconductors.

“They don’t want to use second-rate technology,” he said.

State-led investment can also push funds the wrong way.

A decade ago, Beijing lavished funding on a breakthrough in domestic chip production called the “China chip”.

The project came crashing down when a whistleblower alerted authorities that the professor behind the programme was buying imports, etching off their markings and stamping on those of his own company.


Twitter Sold Data Access to Cambridge Analytica–Linked Researcher

April 30, 2018

Twitter Inc. sold data access to the Cambridge University academic who also obtained millions of Facebook Inc. users’ information

Aleksandr Kogan had access to the data for single day in 2015 — Twitter has removed Global Science Research as an advertiser

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Twitter Inc. sold data access to the Cambridge University academic who also obtained millions of Facebook Inc. users’ information that was later passed to a political consulting firm without the users’ consent.

Aleksandr Kogan, who created a personality quiz on Facebook to harvest information later used by Cambridge Analytica, established his own commercial enterprise, Global Science Research (GSR). That firm was granted access to large-scale public Twitter data, covering months of posts, for one day in 2015, according to Twitter.

“In 2015, GSR did have one-time API access to a random sample of public tweets from a five-month period from December 2014 to April 2015,” Twitter said in a statement to Bloomberg. “Based on the recent reports, we conducted our own internal review and did not find any access to private data about people who use Twitter.”

The company has removed Cambridge Analytica and affiliated entities as advertisers. Twitter said GSR paid for the access; it provided no further details.

Explanations Needed

Twitter provides certain companies, developers and users with access to public data through its application programming interfaces (APIs), or software that requests and delivers information. The company sells the data to organizations, which often use them to analyze events, sentiment or customer service.

Enterprise customers are given the broadest data access, which includes the last 30 days of tweets or access to tweets from as far back as 2006. To get that access, the customers must explain how they plan to use the data, and who the end users will be.

Twitter doesn’t sell private direct messaging data, and users must opt in to have their tweets include a location. Twitter’s “data licensing and other revenue” grew about 20 percent, to $90 million, in the first quarter.

Social media companies have come under intense scrutiny over reports that Facebook failed to protect the privacy of its users. Companies like Twitter tend to have access to less private information than Facebook. The latter has said that Cambridge Analytica, which worked for President Donald Trump’s 2016 campaign, may have harvested data on 87 million users.

Personality Quiz

About 270,000 people downloaded Kogan’s personality quiz app, which shared information the people and their friends that was then improperly passed to Cambridge Analytica. Facebook Chief Executive Officer Mark Zuckerberg has testified in front of Congress about the misuse of data, and lawmakers have called on Twitter CEO Jack Dorsey and Google CEO Sundar Pichai to testify as well.

Criticism of Twitter’s failure to prevent misinformation and abuse on its platform has risen since the 2016 election. In the first quarter, the company removed more than 142,000 applications connected to the Twitter API that was collectively responsible for more than 130 million “low-quality” tweets during the period. The company has also limited the ability of users to perform coordinated actions across multiple accounts.

Bloomberg LP produces TicToc, a global breaking news network for the Twitter service.