Friday, August 31, 2018
Why California's Privacy Law Won't Hurt Facebook or Google
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
Antonio García Martínez (@antoniogm) is an Ideas contributor for WIRED. Previously he worked on Facebook’s early monetization team, where he headed its targeting efforts. His 2016 memoir, Chaos Monkeys, was a New York Times best seller and NPR Best Book of the Year.
First, what the law does.
CCPA resembles a weaker form of Europe’s General Data Protection Regulation, or GDPR, which took effect in May. The California law requires companies to provide an opt-out to data sharing (GDPR required an opt-in), clear statements of what data is being collected or shared with third parties (as does the GDPR), and the right to delete data about yourself. The unique element, and the only one that the tech giants really pushed back on, was a provision granting individuals the right to sue companies for violating their privacy. The clause was effectively neutered when a political compromise limited the right to cases of egregious data loss or theft.
This resemblance to GDPR, if you’re a privacy activist, is more bug than feature: Companies like Facebook and Google already comply with GDPR (or comply as much as anyone) and have extended those GDPR protections to US users. When the CCPA takes effect on January 1, 2020, the average Facebook user will likely not notice.
To understand why the CCPA won’t impact Facebook in any meaningful way requires understanding (at a high level, not to worry) how Facebook’s ads ecosystem treats data and outside partners. Unlike much of the ad-tech world, Facebook lives in a walled garden where no data leaves and very little enters. When an advertiser wants to retarget you, it exchanges your contact information with Facebook, both sides agreeing to a pseudonym for you, before placing you in one or more targeting buckets (“shoe shoppers,” for example). For Facebook’s most powerful and invasive micro-targeting, almost no data is shared between advertiser and publisher, and data middlemen are largely absent. Which is why, if you download your data from Facebook, the juiciest information is in the least remarkable section: “Advertisers Who Uploaded a Contact List With Your Information.” Users and journalists fixate on the supposed creepiness of Facebook having a call log for you, for example, but the real targeters are buried in that list of companies sharing contact information. The CCPA won’t change this.
So who is impacted by the CCPA?
Primarily, companies you’ve never heard of like Drawbridge and LiveRamp (now owned by Acxiom, another company you’ve never heard of, but which knows everything about you). Drawbridge, using data that it managed to beg or borrow, like your IP address or GPS-derived location, figures out all the devices you own. Why? So that an online retailer that notices you browsing for a new handbag on your work computer can serve you an ad for that handbag on your mobile device on your commute home. Such “cross-device targeting and attribution” is one of the holy grails of modern digital advertising.
What does LiveRamp do? Ever notice how you seem to get served ads online for products you bought in physical stores? That’s not because Facebook is eavesdropping on your phone. It’s done via what’s known as “data onboarding,” where personal data like your name, address, or phone number (which retailers know through loyalty-card programs and the like) are converted into ways to target you online. Middlemen like LiveRamp join online with offline by buying your personal data and then working with publishers—email newsletters, dating sites—to identify your browser cookies. Don’t sweat the details; the net of all this hackery is a table with your personal data plus a browser cookie or mobile device ID, which allows, say, a pharmacy chain that knows your phone number (which you entered at checkout to save 5 percent) to link all your purchases to your online presence.
Together, these relatively small players provide an alternative targeting ecosystem that competes with Facebook’s one-stop-shop. If you’re Walgreens, you can use LiveRamp (or its competitors) to target people via real-time ad exchanges. Or you can upload your customers’ contact details to Facebook. The advertiser is agnostic, so long as the pixels reach the right audience.
Here’s why Facebook is better positioned for CCPA, or GDPR: It has a direct relationship with you. How does it know every device you use? Because the first thing you do when you buy a new device is log into Facebook, Instagram, or WhatsApp. How does it know your name, phone number, and address? Because you told it those things, or opted into sharing your location via the Facebook app.
The California and European privacy rules favor these first-party relationships. Data coming from elsewhere—known as third-party data—is viewed with more suspicion, so this privileged state of affairs is unlikely to change soon. So long as Facebook’s apps remain as addictive as they are, Facebook will know who you are, where you are, and every digital pseudonym for you, whether a browser cookie or a mailing address.
You might now be wondering if this approach to advertising was a piece of far-sighted strategy by Facebook, to avoid the inevitable privacy storm. I can state, with some authority since I was at Facebook at the time, that the answer is no. This closed system of identity-matching with minimal data sharing was conjured mostly to assuage the mutual suspicions of Facebook and its advertisers: Advertisers didn’t trust Facebook not to recycle their precious consumer data, and Facebook didn’t trust advertisers not to repurpose its user data. A minimalist data join, with all Facebook data remaining safely within its walls and Facebook not touching often dubious outside data, was the result. It’s just a happy accident (for Facebook) that this is the optimal architecture for weathering privacy regulation like the CCPA and GDPR.
Ultimately, the CCPA is a fatal blow not to Facebook but to the competing middlemen. Shortly before GDPR took effect, Drawbridge announced it was leaving the European market. Then it announced it was leaving advertising altogether. LiveRamp is reported to be up for sale. Facebook itself shut down its Partner Categories program that used targeting segments from data brokers like Acxiom, cutting off its last connection to that world. Under CCPA and GDPR, if you want to target consumers across devices, or use your trove of offline consumer data online, you’ll have to use Facebook instead of the few competitors that once eked out a business outside its walled garden.
It’s as if the privacy activists labored to manufacture a fearsome cannon with which to subdue giants like Facebook and Google, loaded it with a scattershot set of legal restrictions, aimed it at the entire ads ecosystem, and fired it with much commotion. When the smoke cleared, the astonished activists found they’d hit only their small opponents, leaving the giants unharmed. Meanwhile, a grinning Facebook stared back at the activists and their mighty cannon, the weapon that they had slyly helped to design.
The good news is that while the activists missed their big, showy target, they hit the often sketchy data arbitragers who do the real dirty work of the advertising machine. Facebook and Google ultimately are not constrained as much by regulation as by users. The first-party relationship with users that allows these companies relative freedom under privacy laws comes with the burden of keeping those users engaged and returning to the app, despite privacy concerns. Acxiom doesn’t have to care about the perception of consumers—they’re not even aware the company exists. For that reason, these third-party data brokers most need the discipline of regulation. The activists may not have gotten the legal weapon they wanted, but they did get the legal weapon that users deserve.
More Great WIRED Stories
Lyft in talks to hire advisor for 2019 IPO: Bloomberg
(Reuters) - U.S. ride services firm Lyft Inc is in talks with an advisor for a targeted March or April 2019 initial public offering, Bloomberg reported, citing people familiar with the matter.
An illuminated sign appears in a Lyft ride-hailing car in Los Angeles, California, U.S. September 21, 2017. REUTERS/Chris Helgren
In September last year, Reuters reported that the second biggest U.S. ride service company was close to hiring an IPO advisory firm in its first concrete step to become publicly listed.
Lyft has hired Class V Group LLC to work with the management on the process and plans to begin taking pitches from banks starting as early as September, Bloomberg said, citing sources. bloom.bg/2NCmGnt
Lyft and Class V Group did not immediately respond to requests seeking comment.
Lyft has, in the past, defied predictions about when it will launch its IPO.
The ride hailer had raised $600 million in its most recent funding round led by Fidelity Management in June this year, doubling its valuation to $15.1 billion in little over a year. Lyft operates in roughly the same number of U.S. cities as rival Uber, which is also planning to go public next year.
An initial public offering for Lyft would amplify Uber’s[UBER.UL] troubles. It would be an opportunistic way for the company, which was valued at $7.5 billion in its last funding round, to capitalize on its larger rival. Fresh capital for Lyft would merely compound the frontrunner’s injuries.
Reporting by Mekhla Raina in Bengaluru; Editing by Sunil Nair
Facebook hires prominent artificial-intelligence expert to open Montreal lab
TORONTO (Reuters) - Facebook Inc plans to open an artificial-intelligence laboratory in Montreal, which will be run by prominent AI researcher Joelle Pineau, two people familiar with the plan said on Friday.
Tech
3 Changes America Needs to Make to Revive Our Entrepreneurial Spirit
Entrepreneurship is, at its essence, about problem-solving. And real-world problems are complex, even messy. The solutions may change how we deal with health issues, transportation, business, the environment, and just about every facet of our lives.
Solving these problems often takes working in a diverse environment, with different kinds of thinkers bringing their own strengths. During the past century, America excelled at uniting people from different backgrounds and points of view, fostering a spirit of open collaboration and an exchange of ideas.
We need to once again encourage that collaborative spirit, and with it boost the type of innovation we need in the 21st Century. By focusing on a few key areas, we all can aid in the effort to stimulate entrepreneurs and innovation.
1. Increase STEM research and interest.
Schools have made a positive impact on efforts to increase interest in STEM (Science, Technology, Engineering, and Math), which can give future entrepreneurs the skills they need. But, federal investments in research has been dropping since the 1970s. We need to do all we can to encourage a new generation of STEM learners. And it"s not just teachers that need to increase interest in the scientific and technical -- it"s something we all need to encourage in our culture.
For example, after-school programs, such as the After-School All-Stars, which is able to connect with more than 70,000 kids nationwide, are a great way to get kids interested in STEM. Programs outside of school hours are particularly helpful to broaden the "branding" for STEM, because those concepts can be applied almost everywhere in our world, so it"s good to make associations outside of a traditional academic environment. Business leaders can make a big difference here by partnering with a school or after-school program to ensure these programs have the resources they need to thrive. Plus, a partnership could help introduce students to entrepreneurship and business careers.
2. Turn researchers into entrepreneurs.
Researchers are constantly making discoveries that could improve our lives and the world we live in. But often their passion for research is disconnected from the practical implementation of their ideas. Instead, they may publish a paper and only hope an entrepreneur will be inspired to act. That means the people who understand a concept best are too rarely the ones that will lead the effort to create a practical solution -- let alone form a company around the idea. To help counter that pattern, the country"s top universities have increased their push for researchers to take their ideas from the lab to the marketplace.
One fruit of this effort is SentiAR, which uses a mixed reality headset and the Microsoft HoloLens to arm physicians with a less invasive tool for treating patients with heart rhythm abnormalities. The researcher team, a married couple who teach at Washington University in St. Louis, created the tech then started the company and sought funding, including a NIH SBIR fast-track award of $2.2M. And both have remained actively involved in the business. That kind of expert oversight of a concept and product idea is the kind of deeply connected leadership we need more of in the business world.
3. Offer support to entrepreneurs who are buried in student loan debt.
The total amount of money that Americans owe in student loans has reached an incredible level -- it"s now at $1.5 trillion. High student loan debt severely limits the life choices of many post-college Americans, including would-be entrepreneurs. This may drive some of them to go for sure bets over riskier innovation, and that can stifle entrepreneurial creativity. Need proof? Just look to the Federal Reserve Bank of Philadelphia"s study, which found that counties with high student debt fall behind other counties when it comes to establishing new businesses.
Although the government offers incentives toward aspiring entrepreneurs in the forms of special student loan repayment options, merely temporarily lowering the minimum required payment on interest-earning loans isn"t doing enough. For potential startup founders, having student loan debt is enough to make investors and lenders think twice before helping to fund their venture. Our aspiring innovators need better options and more support. Business leaders can take action by starting scholarship programs and advocating for policies that help aspiring entrepreneurs take the risk, even if they have student loan debt.
Twitter's CEO Asked Elon Musk to Speak to All of Twitter's Employees. Here's the Truly Surprising Way It Changed 1 Musk Fan's Life
A few weeks ago, the CEO of Twitter, Jack Dorsey, took the stage at an unusual event in San Francisco, with virtually every Twitter employee in attendance. Looking down at his phone, he read aloud some direct messages he"d been trading with Elon Musk--inviting Musk to speak, in fact, at that very event.
"I kinda hate speaking events," Musk had replied, literally two minutes after the initial invitation. "But maybe for you all. I do love Twitter and I think it is a force for good."
As rumors about Musk"s appearance had spread among Twitter employees, their excitement had built. But now, literally minutes before some hoped that Musk would appear, Dorsey reported: "Unfortunately, he got extremely, extremely busy, and isn"t able to make it."
Twitter wouldn"t comment beyond Dorsey"s remarks (which haven"t been reported before, and which you can see in a video at the end of this column). And my efforts to reach Musk via both Tesla and SpaceX went unanswered. But two things are very clear.
First, literally an hour before the speaking slot at this event, Twitter didn"t know who was going to wind up speaking instead of Musk.
And second, the person they found to fill in--Jon Carmichael, a Twitter photographer who describes Musk as "my biggest source of inspiration"--turned the experience into a truly life-changing moment.
"I was so devastated."
In retrospect, it"s not such a big surprise that Musk wasn"t able to make it. The Aug. 2 event at the Moscone Center in San Francisco came basically halfway between his "pedo guy" tweet and his "funding secured" tweet--to say nothing of the fact that Musk was crushing to try to meet Tesla production goals at the time.
He had a lot going on. But, his absence apparently created a vacuum--and an amazing opportunity for Carmichael.
On the rumor and hope that Musk might speak, Carmichael had decided to give him a truly breathtaking gift: the first print of his now-iconic eclipse photo (which almost nobody had seen yet, on Aug 2). It was "printed on crystal with laser," as he told me, "and back-mounted onto Dibond, which is like aluminum."
But then, Musk didn"t show.
"I worked very hard and spent a lot of money on this gift for him, and I got to the event and last minute, Elon [wasn"t there]. And I was so devastated," Carmichael told me. "So I thought, maybe I should give this to Jack. You know, Jack Dorsey, the CEO."
"We"re changing the whole program"
An hour before Dorsey wound up taking the stage to talk about Musk not being there, Carmichael in a ballroom just above. He has literally started to write a note to Dorsey explaining the gift.
"All of sudden, I"m in this giant ballroom by myself and here"s Jack Dorsey walking right toward me," Carmichael recalled. "He"s never by himself. He"s always extremely busy."
"Hey Jack," he called out.
"Yeah, what"s up?"
Carmichael gave him the Dibond print of his photo that he"d originally intended for Musk.
"It"s heavy, and he opens it up and goes, "What is this?"" Carmichael told me. "I said, "Oh, you remember The Great American Eclipse last year?" Yada, yada, yada. "This is a photo I took." I told him the whole story."
A year ago, millions came together and witnessed one of the most beautiful moments in history. My dream was to capture this from a unique view to remind us of our place in the universe and to stay united in our humanity. Thank you @Twitter for sharing that vision. #eclipse108 pic.twitter.com/AjSzf27xxQ
-- Jon Carmichael (@photographerjon) August 21, 2018
Dorsey was blown away by the photo. And with 45 minutes to go before show time, he told Carmichael that he wanted him to do the speech.
"And he goes, "Okay, here"s what"s going to happen. In 45 minutes, I"m going to be introducing you on stage to share this story and this image with my entire company. Can you do that?"" Carmichael recounted. "And I"m like--internally, I"m freaking out."
"This is my first speech I"ve ever given"
We"ll just give away part of the ending here. Carmichael rose the occasion like nobody could have predicted. Right at the start, he confessed with a smile: "This is my first speech I"ve ever given," and the audience was pretty much immediately won over.
(A video of Dorsey talking about Musk, and then Carmichael"s entire internal presentation to all of Twitter"s employees, is at the end of this post.)
"It was just the most beautiful moment I could"ve ever imagined," Carmichael recalled. "It was so moving. I got multiple standing ovations. This was my first unveiling [of the photo] to 3,500 people ... three weeks before I was going to unveil it publicly, on the one year anniversary of the eclipse."
And as a result of his talk, Carmichael said, Twitter completely bought in. The company flagged his photo on the platform so that nobody could share it until he officially unveiled it.
And when he did actually share it,--on the anniversary, it came in the form of a streamed broadcast to all 32 Twitter offices around the world.
A life-changing experience
There are many ironies in Carmichael"s story, including the fact that he had his hopes dashed twice in its course, only to find that what he"d hoped would happen wasn"t as advantageous as what actually did happen.
The first example was that he"d originally entered a contest to get a seat on a special Alaska Airlines eclipse flight to photograph the eclipse--but he didn"t win. However, it turned out that the Southwest flight he found, and that he flew on as a regular passenger, offered a far better vantage point to create his photo.
The second disappointment was his excitement over the idea of meeting Musk. But had Musk been there to speak, that would have meant Carmichael never would have had his chance on stage. And then Twitter wouldn"t have been as involved to use its publicity machine and help him share the photo around the world.
"I immediately thought in that moment, this quote by the Dalai Lama," Carmichael recalled. (In fact, the Dalai Lama was briefly one of his photography clients.) "And he says, "Remember, that sometimes not getting what you want can be a wonderful stroke of luck.."
Carmichael says his ultimate goal is to try to the use his photo and his story to inspire more interest in astronomy and the idea of another total eclipse. In 2017, he said, tens of millions of people lived within a half hour of where they could have experienced totality, but didn"t make the trip.
"I"m really passionate about that, because this was such a uniting moment in our history and it was such a beautiful moment, too," he said. "So in six years I want that to be even bigger."
Six years: The next total solar eclipse visible over the United States will be on April 8, 2024.
So if you"re moved, and you take the opportunity to go and observe totality yourself in April 2024, just remember the chain reaction: You might never have seen it, if Elon Musk had been able to give a speech at Twitter in August 2018.
Here"s the video of Dorsey talking about his DMs with Musk, followed by Carmichael"s speech at the Twitter event.
[youtube https://www.youtube.com/watch?v=2SfPogWOu9k?rel=0]
Why California's Privacy Law Won't Hurt Facebook or Google
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
Antonio García Martínez (@antoniogm) is an Ideas contributor for WIRED. Previously he worked on Facebook’s early monetization team, where he headed its targeting efforts. His 2016 memoir, Chaos Monkeys, was a New York Times best seller and NPR Best Book of the Year.
First, what the law does.
CCPA resembles a weaker form of Europe’s General Data Protection Regulation, or GDPR, which took effect in May. The California law requires companies to provide an opt-out to data sharing (GDPR required an opt-in), clear statements of what data is being collected or shared with third parties (as does the GDPR), and the right to delete data about yourself. The unique element, and the only one that the tech giants really pushed back on, was a provision granting individuals the right to sue companies for violating their privacy. The clause was effectively neutered when a political compromise limited the right to cases of egregious data loss or theft.
This resemblance to GDPR, if you’re a privacy activist, is more bug than feature: Companies like Facebook and Google already comply with GDPR (or comply as much as anyone) and have extended those GDPR protections to US users. When the CCPA takes effect on January 1, 2020, the average Facebook user will likely not notice.
To understand why the CCPA won’t impact Facebook in any meaningful way requires understanding (at a high level, not to worry) how Facebook’s ads ecosystem treats data and outside partners. Unlike much of the ad-tech world, Facebook lives in a walled garden where no data leaves and very little enters. When an advertiser wants to retarget you, it exchanges your contact information with Facebook, both sides agreeing to a pseudonym for you, before placing you in one or more targeting buckets (“shoe shoppers,” for example). For Facebook’s most powerful and invasive micro-targeting, almost no data is shared between advertiser and publisher, and data middlemen are largely absent. Which is why, if you download your data from Facebook, the juiciest information is in the least remarkable section: “Advertisers Who Uploaded a Contact List With Your Information.” Users and journalists fixate on the supposed creepiness of Facebook having a call log for you, for example, but the real targeters are buried in that list of companies sharing contact information. The CCPA won’t change this.
So who is impacted by the CCPA?
Primarily, companies you’ve never heard of like Drawbridge and LiveRamp (now owned by Acxiom, another company you’ve never heard of, but which knows everything about you). Drawbridge, using data that it managed to beg or borrow, like your IP address or GPS-derived location, figures out all the devices you own. Why? So that an online retailer that notices you browsing for a new handbag on your work computer can serve you an ad for that handbag on your mobile device on your commute home. Such “cross-device targeting and attribution” is one of the holy grails of modern digital advertising.
What does LiveRamp do? Ever notice how you seem to get served ads online for products you bought in physical stores? That’s not because Facebook is eavesdropping on your phone. It’s done via what’s known as “data onboarding,” where personal data like your name, address, or phone number (which retailers know through loyalty-card programs and the like) are converted into ways to target you online. Middlemen like LiveRamp join online with offline by buying your personal data and then working with publishers—email newsletters, dating sites—to identify your browser cookies. Don’t sweat the details; the net of all this hackery is a table with your personal data plus a browser cookie or mobile device ID, which allows, say, a pharmacy chain that knows your phone number (which you entered at checkout to save 5 percent) to link all your purchases to your online presence.
Together, these relatively small players provide an alternative targeting ecosystem that competes with Facebook’s one-stop-shop. If you’re Walgreens, you can use LiveRamp (or its competitors) to target people via real-time ad exchanges. Or you can upload your customers’ contact details to Facebook. The advertiser is agnostic, so long as the pixels reach the right audience.
Here’s why Facebook is better positioned for CCPA, or GDPR: It has a direct relationship with you. How does it know every device you use? Because the first thing you do when you buy a new device is log into Facebook, Instagram, or WhatsApp. How does it know your name, phone number, and address? Because you told it those things, or opted into sharing your location via the Facebook app.
The California and European privacy rules favor these first-party relationships. Data coming from elsewhere—known as third-party data—is viewed with more suspicion, so this privileged state of affairs is unlikely to change soon. So long as Facebook’s apps remain as addictive as they are, Facebook will know who you are, where you are, and every digital pseudonym for you, whether a browser cookie or a mailing address.
You might now be wondering if this approach to advertising was a piece of far-sighted strategy by Facebook, to avoid the inevitable privacy storm. I can state, with some authority since I was at Facebook at the time, that the answer is no. This closed system of identity-matching with minimal data sharing was conjured mostly to assuage the mutual suspicions of Facebook and its advertisers: Advertisers didn’t trust Facebook not to recycle their precious consumer data, and Facebook didn’t trust advertisers not to repurpose its user data. A minimalist data join, with all Facebook data remaining safely within its walls and Facebook not touching often dubious outside data, was the result. It’s just a happy accident (for Facebook) that this is the optimal architecture for weathering privacy regulation like the CCPA and GDPR.
Ultimately, the CCPA is a fatal blow not to Facebook but to the competing middlemen. Shortly before GDPR took effect, Drawbridge announced it was leaving the European market. Then it announced it was leaving advertising altogether. LiveRamp is reported to be up for sale. Facebook itself shut down its Partner Categories program that used targeting segments from data brokers like Acxiom, cutting off its last connection to that world. Under CCPA and GDPR, if you want to target consumers across devices, or use your trove of offline consumer data online, you’ll have to use Facebook instead of the few competitors that once eked out a business outside its walled garden.
It’s as if the privacy activists labored to manufacture a fearsome cannon with which to subdue giants like Facebook and Google, loaded it with a scattershot set of legal restrictions, aimed it at the entire ads ecosystem, and fired it with much commotion. When the smoke cleared, the astonished activists found they’d hit only their small opponents, leaving the giants unharmed. Meanwhile, a grinning Facebook stared back at the activists and their mighty cannon, the weapon that they had slyly helped to design.
The good news is that while the activists missed their big, showy target, they hit the often sketchy data arbitragers who do the real dirty work of the advertising machine. Facebook and Google ultimately are not constrained as much by regulation as by users. The first-party relationship with users that allows these companies relative freedom under privacy laws comes with the burden of keeping those users engaged and returning to the app, despite privacy concerns. Acxiom doesn’t have to care about the perception of consumers—they’re not even aware the company exists. For that reason, these third-party data brokers most need the discipline of regulation. The activists may not have gotten the legal weapon they wanted, but they did get the legal weapon that users deserve.
More Great WIRED Stories
California looks to adopt Obama-style net neutrality rules
LOS ANGELES (Reuters) - California lawmakers moved on Thursday toward imposing the nation’s strictest net neutrality laws on internet providers, flying in the face of sweeping new Federal Communications Commission (FCC) rules seen as a win for the companies.
FILE PHOTO: Supporters of Net Neutrality protest the FCC"s recent decision to repeal the program in Los Angeles, California, November 28, 2017. REUTERS/ Kyle Grillot
Members of the California Assembly voted 58-17 to send the bill to their colleagues in the state Senate, who have until midnight to pass so-called SB 822 on the final day of the legislative session or wait until next year.
If the measure passes both chambers of the Democrat-controlled state legislature it would still require approval from Governor Jerry Brown, a Democrat, who has not said if he would sign it into law.
“We have just one final vote left to go to get the strongest net neutrality protections in the nation passed out of the legislature and onto the governor’s desk,” state Senator Scott Wiener, the bill’s author, said in a statement.
“We will take nothing for granted, but we have momentum and the support of a broad and diverse coalition that understands the importance of a free and open internet for everyone,” Wiener said.
Proponents of California’s proposed regulations contend that net neutrality rules would bar major internet providers from blocking, slowing down or giving preferential access to online content.
Critics say the restrictions limit internet providers’ ability to recoup the costs of network improvements and lead them to curb investment.
In June, the FCC under President Donald Trump repealed rules adopted during the Obama administration that barred internet service providers from blocking content or charging more for access, a move intended to establish a more level playing field or “net neutrality.”
State attorneys general and the District of Columbia asked a federal appeals court earlier this month to reinstate the Obama regulations.
They were joined in that action a week later by a coalition of trade groups representing companies including Alphabet Inc, Facebook Inc and Amazon.com Inc.
The U.S. Senate voted in May to keep the Obama-era internet rules but the measure is unlikely to be approved by the House of Representatives or the White House.
(This version of the story corrects day of the week to Thursday in first paragraph)
Reporting by Dan Whitcomb; Editing by Paul Tait
Why California's Privacy Law Won't Hurt Facebook or Google
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
Antonio García Martínez (@antoniogm) is an Ideas contributor for WIRED. Previously he worked on Facebook’s early monetization team, where he headed its targeting efforts. His 2016 memoir, Chaos Monkeys, was a New York Times best seller and NPR Best Book of the Year.
First, what the law does.
CCPA resembles a weaker form of Europe’s General Data Protection Regulation, or GDPR, which took effect in May. The California law requires companies to provide an opt-out to data sharing (GDPR required an opt-in), clear statements of what data is being collected or shared with third parties (as does the GDPR), and the right to delete data about yourself. The unique element, and the only one that the tech giants really pushed back on, was a provision granting individuals the right to sue companies for violating their privacy. The clause was effectively neutered when a political compromise limited the right to cases of egregious data loss or theft.
This resemblance to GDPR, if you’re a privacy activist, is more bug than feature: Companies like Facebook and Google already comply with GDPR (or comply as much as anyone) and have extended those GDPR protections to US users. When the CCPA takes effect on January 1, 2020, the average Facebook user will likely not notice.
To understand why the CCPA won’t impact Facebook in any meaningful way requires understanding (at a high level, not to worry) how Facebook’s ads ecosystem treats data and outside partners. Unlike much of the ad-tech world, Facebook lives in a walled garden where no data leaves and very little enters. When an advertiser wants to retarget you, it exchanges your contact information with Facebook, both sides agreeing to a pseudonym for you, before placing you in one or more targeting buckets (“shoe shoppers,” for example). For Facebook’s most powerful and invasive micro-targeting, almost no data is shared between advertiser and publisher, and data middlemen are largely absent. Which is why, if you download your data from Facebook, the juiciest information is in the least remarkable section: “Advertisers Who Uploaded a Contact List With Your Information.” Users and journalists fixate on the supposed creepiness of Facebook having a call log for you, for example, but the real targeters are buried in that list of companies sharing contact information. The CCPA won’t change this.
So who is impacted by the CCPA?
Primarily, companies you’ve never heard of like Drawbridge and LiveRamp (now owned by Acxiom, another company you’ve never heard of, but which knows everything about you). Drawbridge, using data that it managed to beg or borrow, like your IP address or GPS-derived location, figures out all the devices you own. Why? So that an online retailer that notices you browsing for a new handbag on your work computer can serve you an ad for that handbag on your mobile device on your commute home. Such “cross-device targeting and attribution” is one of the holy grails of modern digital advertising.
What does LiveRamp do? Ever notice how you seem to get served ads online for products you bought in physical stores? That’s not because Facebook is eavesdropping on your phone. It’s done via what’s known as “data onboarding,” where personal data like your name, address, or phone number (which retailers know through loyalty-card programs and the like) are converted into ways to target you online. Middlemen like LiveRamp join online with offline by buying your personal data and then working with publishers—email newsletters, dating sites—to identify your browser cookies. Don’t sweat the details; the net of all this hackery is a table with your personal data plus a browser cookie or mobile device ID, which allows, say, a pharmacy chain that knows your phone number (which you entered at checkout to save 5 percent) to link all your purchases to your online presence.
Together, these relatively small players provide an alternative targeting ecosystem that competes with Facebook’s one-stop-shop. If you’re Walgreens, you can use LiveRamp (or its competitors) to target people via real-time ad exchanges. Or you can upload your customers’ contact details to Facebook. The advertiser is agnostic, so long as the pixels reach the right audience.
Here’s why Facebook is better positioned for CCPA, or GDPR: It has a direct relationship with you. How does it know every device you use? Because the first thing you do when you buy a new device is log into Facebook, Instagram, or WhatsApp. How does it know your name, phone number, and address? Because you told it those things, or opted into sharing your location via the Facebook app.
The California and European privacy rules favor these first-party relationships. Data coming from elsewhere—known as third-party data—is viewed with more suspicion, so this privileged state of affairs is unlikely to change soon. So long as Facebook’s apps remain as addictive as they are, Facebook will know who you are, where you are, and every digital pseudonym for you, whether a browser cookie or a mailing address.
You might now be wondering if this approach to advertising was a piece of far-sighted strategy by Facebook, to avoid the inevitable privacy storm. I can state, with some authority since I was at Facebook at the time, that the answer is no. This closed system of identity-matching with minimal data sharing was conjured mostly to assuage the mutual suspicions of Facebook and its advertisers: Advertisers didn’t trust Facebook not to recycle their precious consumer data, and Facebook didn’t trust advertisers not to repurpose its user data. A minimalist data join, with all Facebook data remaining safely within its walls and Facebook not touching often dubious outside data, was the result. It’s just a happy accident (for Facebook) that this is the optimal architecture for weathering privacy regulation like the CCPA and GDPR.
Ultimately, the CCPA is a fatal blow not to Facebook but to the competing middlemen. Shortly before GDPR took effect, Drawbridge announced it was leaving the European market. Then it announced it was leaving advertising altogether. LiveRamp is reported to be up for sale. Facebook itself shut down its Partner Categories program that used targeting segments from data brokers like Acxiom, cutting off its last connection to that world. Under CCPA and GDPR, if you want to target consumers across devices, or use your trove of offline consumer data online, you’ll have to use Facebook instead of the few competitors that once eked out a business outside its walled garden.
It’s as if the privacy activists labored to manufacture a fearsome cannon with which to subdue giants like Facebook and Google, loaded it with a scattershot set of legal restrictions, aimed it at the entire ads ecosystem, and fired it with much commotion. When the smoke cleared, the astonished activists found they’d hit only their small opponents, leaving the giants unharmed. Meanwhile, a grinning Facebook stared back at the activists and their mighty cannon, the weapon that they had slyly helped to design.
The good news is that while the activists missed their big, showy target, they hit the often sketchy data arbitragers who do the real dirty work of the advertising machine. Facebook and Google ultimately are not constrained as much by regulation as by users. The first-party relationship with users that allows these companies relative freedom under privacy laws comes with the burden of keeping those users engaged and returning to the app, despite privacy concerns. Acxiom doesn’t have to care about the perception of consumers—they’re not even aware the company exists. For that reason, these third-party data brokers most need the discipline of regulation. The activists may not have gotten the legal weapon they wanted, but they did get the legal weapon that users deserve.
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As Tesla shares fall, Amazon takes over as most shorted U.S. stock
NEW YORK (Reuters) - With Tesla Inc’s (TSLA.O) shares briefly dipping below the $300 level on Thursday, the electric carmaker ceded its seat as the most shorted U.S. stock to Amazon.com Inc (AMZN.O), according to data from financial technology and analytics firm S3 Partners.
FILE PHOTO: A Tesla logo is seen in Los Angeles, California U.S. January 12, 2018. REUTERS/Lucy Nicholson/File Photo
Tesla short interest in dollars, calculated using the number of shares sold short and the share price, stood at $9.93 billion, on Thursday, just shy of $9.95 billion for Amazon, S3 Partners data showed.
Analysts said investors were still shorting Tesla shares, or taking positions that amounted to bets the stock would keep declining. Short-sellers aim to profit by selling borrowed shares, hoping to buy them back later at a lower price.
“While there was some short covering the week after the tweet, there has still not been any significant net Tesla short covering on the Street,” said Ihor Dusaniwsky, head of research at S3 in New York.
“Any traders who have closed down their positions to realize some profits have been replaced by new ones looking for continued price weakness,” he said.
Tesla shares whipsawed this month after Chief Executive Elon Musk on Aug. 7 tweeted he planned to take the company private, only to abandon the idea by Aug. 24.
Tesla closed down 0.6 percent at $303.15, on Thursday. The stock drifted as low as $288.20 in intra-day trade as recently as Aug. 20, but it has not closed below $300 since July 31. Tesla rose as high as $387.46 following Musk’s initial tweet about the going-private plan.
Since the Aug. 7 tweet, the dollar amount of Tesla shares sold short has dropped by 16 percent, while that for Amazon has climbed by 32 percent, S3 Partners data showed.
Amazon shares rose above $2,000 for the first time on Thursday and the company is just shy of a $1 trillion market capitalization.
S3’s Dusaniwsky, however, said that with Tesla shares near the $300 level, the company could reclaim top spot for the most shorted U.S. stock, where it had stood since early May.
“A $300 Tesla price may be a signal of increased short selling since when Tesla’s stock price dipped below $300 per share in March, shares shorted climbed from 30.0 million to 41.6 million in just over two months,” said Dusaniwsky.
Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Netflix (NFLX.O), Microsoft (MSFT.O) and Facebook Inc (FB.O), are some other top shorted U.S. stocks, as some investors have bet the high-flying technology names are due for a pullback.
Reporting by Saqib Iqbal Ahmed; Editing by Alden Bentley and David Gregorio
New OpenStack cloud release embraces bare metal
OpenStack is getting bigger than ever. It now powers more than 75 public cloud data centers and thousands of private clouds at a scale of more than 10 million compute cores. But it"s always been hard to upgrade from one version of OpenStack to another, and it"s been hard to deploy on bare metals. With OpenStack 18, Rocky, both problems are much easier to deal with now.
The open-source OpenStack cloud, like its ancestors, has always run well on diverse hardware architectures -- bare metal, virtual machines (VMs), graphics processing units (GPUs), and containers. Bare metal was always a bit tricky. OpenStack Ironic, its bare metal provisioning module, is bringing more sophisticated management and automation capabilities to bare metal infrastructure. Nova, which provisions compute instances, now supports creating both virtual machines (VM)s and bare metal servers. This means it also supports multi tenancy, so users can manage physical infrastructure in the same way they manage VMs.
Also: Open-source community has an integration problem: OpenStack
Other new Ironic features include:
- User-managed BIOS settings: BIOS (basic input output system) performs hardware initialization and has many configuration options that support a variety of use cases when customized. Options can help users gain performance, configure power management options, or enable technologies like single root input/output virtualization (SR-IOV) or Data Plane Development Kit (DPDK). Ironic also enables users to manage BIOS settings, supporting use cases like Network Functions Virtualization (NFV) and giving users more flexibility.
- Conductor groups: In Ironic, the "conductor" is what uses drivers to execute operations on the hardware. Ironic has introduced the "conductor_group" property, which can be used to restrict what nodes a particular conductor (or conductors) have control over. This allows users to isolate nodes based on physical location, reducing network hops for increased security and performance.
- RAM Disk deployment interface: A new interface in Ironic for diskless deployments. This is seen in large-scale and high performance computing (HPC) use cases when operators desire fully ephemeral instances for rapidly standing up a large-scale environment.
Julia Kreger, Red Hat principal software engineer and OpenStack Ironic project team lead, said in a statement, "OpenStack Ironic provides bare metal cloud services, bringing the automation and speed of provisioning normally associated with virtual machines to physical servers. This powerful foundation lets you run VMs and containers in one infrastructure platform, and that"s what operators are looking for."
This isn"t just theory. It works. And it heading into production.
James Penick, Oath"s IaaS architect (Oath is AOL and Yahoo"s parent company), said Oath is already using OpenStack to manage "hundreds of thousands of bare metal compute resources in our data centers." He added, "We have made significant changes to our supply chain process using OpenStack, fulfilling common bare metal quota requests within minutes."
That"s good, but it"s not good enough.
"We"re looking forward to deploying the Rocky release to take advantage of its numerous enhancements such as BIOS management, which will further streamline how we maintain, manage and deploy our infrastructure," Penick said.
Also: How to install OpenStack on Ubuntu Server with Devstack TechRepublic
That"s great, but many OpenStack users are already saying, "Maybe I"ll install this in 2021."
Upgrading OpenStack isn"t easy. But OpenStack Rocky"s Fast Forward Upgrade (FFU) feature is ready for prime time, and it"s all set to help users overcome upgrade hurdles and get on newer releases of OpenStack faster. Now, FFU lets a OpenStack on OpenStack (TripleO) user on Release "N", and they can quickly speed through intermediary releases to get on Release "N+3" (the current iteration of FFU being the Newton release to Queens). You can"t jump all the way to Rocky, but you can a lot closer to it more quickly than you ever could before.
Other new features are:
- Cyborg provides lifecycle management for accelerators like GPUs, FPGA, DPDK, and SSDs. In Rocky, Cyborg introduces a new REST API for FPGAs. These floating point chips are used machine learning, image recognition, and other HPC use cases. This enables users to dynamically change the functions loaded on an FPGA device.
- Qinling is introduced in Rocky. Qinling ("CHEEN - LEENG"), a function-as-a-service (FaaS) project. This delivers serverless capabilities on top of OpenStack clouds. It also enables developers to run functions on OpenStack clouds without managing servers, VMs or containers -- while still connecting to other OpenStack services like Keystone.
- Masakari, which supports high availability by providing automatic recovery from failures, expands its monitoring capabilities to include internal failures in an instance, such as a hung OS, data corruption, or a scheduling failure.
- Octavia, the load balancing project, adds support for UDP (user datagram protocol). This brings load balancing to edge and IoT use cases.
- Magnum, a project that makes container orchestration engines and their resources first-class resources in OpenStack, has become a Certified Kubernetes installer. This makes it easier to deploy Kubernetes on OpenStack.
Want to check the new OpenStack out? You can download Rocky today.
Related Stories:
New OpenStack cloud release embraces bare metal
OpenStack is getting bigger than ever. It now powers more than 75 public cloud data centers and thousands of private clouds at a scale of more than 10 million compute cores. But it"s always been hard to upgrade from one version of OpenStack to another, and it"s been hard to deploy on bare metals. With OpenStack 18, Rocky, both problems are much easier to deal with now.
The open-source OpenStack cloud, like its ancestors, has always run well on diverse hardware architectures -- bare metal, virtual machines (VMs), graphics processing units (GPUs), and containers. Bare metal was always a bit tricky. OpenStack Ironic, its bare metal provisioning module, is bringing more sophisticated management and automation capabilities to bare metal infrastructure. Nova, which provisions compute instances, now supports creating both virtual machines (VM)s and bare metal servers. This means it also supports multi tenancy, so users can manage physical infrastructure in the same way they manage VMs.
Also: Open-source community has an integration problem: OpenStack
Other new Ironic features include:
- User-managed BIOS settings: BIOS (basic input output system) performs hardware initialization and has many configuration options that support a variety of use cases when customized. Options can help users gain performance, configure power management options, or enable technologies like single root input/output virtualization (SR-IOV) or Data Plane Development Kit (DPDK). Ironic also enables users to manage BIOS settings, supporting use cases like Network Functions Virtualization (NFV) and giving users more flexibility.
- Conductor groups: In Ironic, the "conductor" is what uses drivers to execute operations on the hardware. Ironic has introduced the "conductor_group" property, which can be used to restrict what nodes a particular conductor (or conductors) have control over. This allows users to isolate nodes based on physical location, reducing network hops for increased security and performance.
- RAM Disk deployment interface: A new interface in Ironic for diskless deployments. This is seen in large-scale and high performance computing (HPC) use cases when operators desire fully ephemeral instances for rapidly standing up a large-scale environment.
Julia Kreger, Red Hat principal software engineer and OpenStack Ironic project team lead, said in a statement, "OpenStack Ironic provides bare metal cloud services, bringing the automation and speed of provisioning normally associated with virtual machines to physical servers. This powerful foundation lets you run VMs and containers in one infrastructure platform, and that"s what operators are looking for."
This isn"t just theory. It works. And it heading into production.
James Penick, Oath"s IaaS architect (Oath is AOL and Yahoo"s parent company), said Oath is already using OpenStack to manage "hundreds of thousands of bare metal compute resources in our data centers." He added, "We have made significant changes to our supply chain process using OpenStack, fulfilling common bare metal quota requests within minutes."
That"s good, but it"s not good enough.
"We"re looking forward to deploying the Rocky release to take advantage of its numerous enhancements such as BIOS management, which will further streamline how we maintain, manage and deploy our infrastructure," Penick said.
Also: How to install OpenStack on Ubuntu Server with Devstack TechRepublic
That"s great, but many OpenStack users are already saying, "Maybe I"ll install this in 2021."
Upgrading OpenStack isn"t easy. But OpenStack Rocky"s Fast Forward Upgrade (FFU) feature is ready for prime time, and it"s all set to help users overcome upgrade hurdles and get on newer releases of OpenStack faster. Now, FFU lets a OpenStack on OpenStack (TripleO) user on Release "N", and they can quickly speed through intermediary releases to get on Release "N+3" (the current iteration of FFU being the Newton release to Queens). You can"t jump all the way to Rocky, but you can a lot closer to it more quickly than you ever could before.
Other new features are:
- Cyborg provides lifecycle management for accelerators like GPUs, FPGA, DPDK, and SSDs. In Rocky, Cyborg introduces a new REST API for FPGAs. These floating point chips are used machine learning, image recognition, and other HPC use cases. This enables users to dynamically change the functions loaded on an FPGA device.
- Qinling is introduced in Rocky. Qinling ("CHEEN - LEENG"), a function-as-a-service (FaaS) project. This delivers serverless capabilities on top of OpenStack clouds. It also enables developers to run functions on OpenStack clouds without managing servers, VMs or containers -- while still connecting to other OpenStack services like Keystone.
- Masakari, which supports high availability by providing automatic recovery from failures, expands its monitoring capabilities to include internal failures in an instance, such as a hung OS, data corruption, or a scheduling failure.
- Octavia, the load balancing project, adds support for UDP (user datagram protocol). This brings load balancing to edge and IoT use cases.
- Magnum, a project that makes container orchestration engines and their resources first-class resources in OpenStack, has become a Certified Kubernetes installer. This makes it easier to deploy Kubernetes on OpenStack.
Want to check the new OpenStack out? You can download Rocky today.
Related Stories:
California looks to adopt Obama-style net neutrality rules
LOS ANGELES (Reuters) - California lawmakers moved on Thursday toward imposing the nation’s strictest net neutrality laws on internet providers, flying in the face of sweeping new Federal Communications Commission (FCC) rules seen as a win for the companies.
FILE PHOTO: Supporters of Net Neutrality protest the FCC"s recent decision to repeal the program in Los Angeles, California, November 28, 2017. REUTERS/ Kyle Grillot
Members of the California Assembly voted 58-17 to send the bill to their colleagues in the state Senate, who have until midnight to pass so-called SB 822 on the final day of the legislative session or wait until next year.
If the measure passes both chambers of the Democrat-controlled state legislature it would still require approval from Governor Jerry Brown, a Democrat, who has not said if he would sign it into law.
“We have just one final vote left to go to get the strongest net neutrality protections in the nation passed out of the legislature and onto the governor’s desk,” state Senator Scott Wiener, the bill’s author, said in a statement.
“We will take nothing for granted, but we have momentum and the support of a broad and diverse coalition that understands the importance of a free and open internet for everyone,” Wiener said.
Proponents of California’s proposed regulations contend that net neutrality rules would bar major internet providers from blocking, slowing down or giving preferential access to online content.
Critics say the restrictions limit internet providers’ ability to recoup the costs of network improvements and lead them to curb investment.
In June, the FCC under President Donald Trump repealed rules adopted during the Obama administration that barred internet service providers from blocking content or charging more for access, a move intended to establish a more level playing field or “net neutrality.”
State attorneys general and the District of Columbia asked a federal appeals court earlier this month to reinstate the Obama regulations.
They were joined in that action a week later by a coalition of trade groups representing companies including Alphabet Inc, Facebook Inc and Amazon.com Inc.
The U.S. Senate voted in May to keep the Obama-era internet rules but the measure is unlikely to be approved by the House of Representatives or the White House.
(This version of the story corrects day of the week to Thursday in first paragraph)
Reporting by Dan Whitcomb; Editing by Paul Tait
California looks to adopt Obama-style net neutrality rules
LOS ANGELES (Reuters) - California lawmakers moved on Thursday toward imposing the nation’s strictest net neutrality laws on internet providers, flying in the face of sweeping new Federal Communications Commission (FCC) rules seen as a win for the companies.
FILE PHOTO: Supporters of Net Neutrality protest the FCC"s recent decision to repeal the program in Los Angeles, California, November 28, 2017. REUTERS/ Kyle Grillot
Members of the California Assembly voted 58-17 to send the bill to their colleagues in the state Senate, who have until midnight to pass so-called SB 822 on the final day of the legislative session or wait until next year.
If the measure passes both chambers of the Democrat-controlled state legislature it would still require approval from Governor Jerry Brown, a Democrat, who has not said if he would sign it into law.
“We have just one final vote left to go to get the strongest net neutrality protections in the nation passed out of the legislature and onto the governor’s desk,” state Senator Scott Wiener, the bill’s author, said in a statement.
“We will take nothing for granted, but we have momentum and the support of a broad and diverse coalition that understands the importance of a free and open internet for everyone,” Wiener said.
Proponents of California’s proposed regulations contend that net neutrality rules would bar major internet providers from blocking, slowing down or giving preferential access to online content.
Critics say the restrictions limit internet providers’ ability to recoup the costs of network improvements and lead them to curb investment.
In June, the FCC under President Donald Trump repealed rules adopted during the Obama administration that barred internet service providers from blocking content or charging more for access, a move intended to establish a more level playing field or “net neutrality.”
State attorneys general and the District of Columbia asked a federal appeals court earlier this month to reinstate the Obama regulations.
They were joined in that action a week later by a coalition of trade groups representing companies including Alphabet Inc, Facebook Inc and Amazon.com Inc.
The U.S. Senate voted in May to keep the Obama-era internet rules but the measure is unlikely to be approved by the House of Representatives or the White House.
(This version of the story corrects day of the week to Thursday in first paragraph)
Reporting by Dan Whitcomb; Editing by Paul Tait
China online video restrictions wipe $20 billion off Tencent's market value
HONG KONG/BEIJING (Reuters) - Plans to limit the number of new online video games in China wiped a further $20 billion off Tencent Holdings’ market value on Friday, ratcheting up concerns over regulatory risks facing firms in the world’s No. 1 market for mobile games.
FILE PHOTO: Visitors attend the annual Tencent Games Carnival (TGC) in Chengdu, Sichuan province, China December 2, 2017. REUTERS/Stringer/File Photo
China’s Ministry of Education said late on Thursday the publishing regulator should also take measures to limit the amount of time young people spend playing games and explore an age-appropriate system for players.
The restrictions are the latest challenge to hit Tencent, China’s largest game operator, which earlier this month blamed a freeze on new game approvals for the technology giant’s first quarterly profit fall in nearly 13 years.
The disappointing results came a day after investors wiped around $15 billion off its market value on news that Chinese regulators had blocked it from charging for of one of its blockbuster titles, “Monster Hunter: World”.
Shares of Tencent, which has a market value of around HK$3.25 trillion ($414.12 billion), plunged as much as 5.3 percent, leading a slide in Chinese video game companies. The benchmark Hang Seng Index fell 1 percent.
Tencent has lost a staggering $164 billion in market value from its peak in January, chiefly on regulatory uncertainty, and now trails arch rival Alibaba Group to be Asia’s second biggest listed company by market capitalization.
Beijing’s latest regulatory directive was included in a document published on the website of the education ministry outlining how China would respond to worsening rates of myopia, or near-sightedness, among young people.
It blamed high levels of short-sightedness on a heavy study load, the spread of mobile phones and other electronic devices, and a lack of outdoor activities and exercise.
The document also called on parents to limit the amount of time their children spend using mobile phones and other electronic devices, and recommended children spend over an hour outdoors every day.
Analysts said while the regulatory overhang could put pressure on game-related shares, they expected top developers to be less affected.
“We expect leading developers to show relative resilience by lengthening lifecycle of existing game franchise and expanding overseas presence,” Jefferies said in a research note.
It estimated Tencent accounted for 42 percent of China’s mobile game market share in 2017.
Tencent’s decline tracked a 7 percent fall in shares of China-based Netease and a 6 percent slide in Chinese online game developer ChangYou in the United States.
In Shenzhen, shares of YOUZU Interactive fell 7.8 percent, Ourpalm slid 4 percent, Tangel Publishing eased 2.1 percent and Focus Media was down 1.7 percent.
Reporting by Anne Marie Roantree in HONG KONG and Elias Glenn in BEIJING; Additional reporting by Donny Kwok; Editing by Muralikumar Anantharaman
Why California's Privacy Law Won't Hurt Facebook or Google
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
Antonio García Martínez (@antoniogm) is an Ideas contributor for WIRED. Previously he worked on Facebook’s early monetization team, where he headed its targeting efforts. His 2016 memoir, Chaos Monkeys, was a New York Times best seller and NPR Best Book of the Year.
First, what the law does.
CCPA resembles a weaker form of Europe’s General Data Protection Regulation, or GDPR, which took effect in May. The California law requires companies to provide an opt-out to data sharing (GDPR required an opt-in), clear statements of what data is being collected or shared with third parties (as does the GDPR), and the right to delete data about yourself. The unique element, and the only one that the tech giants really pushed back on, was a provision granting individuals the right to sue companies for violating their privacy. The clause was effectively neutered when a political compromise limited the right to cases of egregious data loss or theft.
This resemblance to GDPR, if you’re a privacy activist, is more bug than feature: Companies like Facebook and Google already comply with GDPR (or comply as much as anyone) and have extended those GDPR protections to US users. When the CCPA takes effect on January 1, 2020, the average Facebook user will likely not notice.
To understand why the CCPA won’t impact Facebook in any meaningful way requires understanding (at a high level, not to worry) how Facebook’s ads ecosystem treats data and outside partners. Unlike much of the ad-tech world, Facebook lives in a walled garden where no data leaves and very little enters. When an advertiser wants to retarget you, it exchanges your contact information with Facebook, both sides agreeing to a pseudonym for you, before placing you in one or more targeting buckets (“shoe shoppers,” for example). For Facebook’s most powerful and invasive micro-targeting, almost no data is shared between advertiser and publisher, and data middlemen are largely absent. Which is why, if you download your data from Facebook, the juiciest information is in the least remarkable section: “Advertisers Who Uploaded a Contact List With Your Information.” Users and journalists fixate on the supposed creepiness of Facebook having a call log for you, for example, but the real targeters are buried in that list of companies sharing contact information. The CCPA won’t change this.
So who is impacted by the CCPA?
Primarily, companies you’ve never heard of like Drawbridge and LiveRamp (now owned by Acxiom, another company you’ve never heard of, but which knows everything about you). Drawbridge, using data that it managed to beg or borrow, like your IP address or GPS-derived location, figures out all the devices you own. Why? So that an online retailer that notices you browsing for a new handbag on your work computer can serve you an ad for that handbag on your mobile device on your commute home. Such “cross-device targeting and attribution” is one of the holy grails of modern digital advertising.
What does LiveRamp do? Ever notice how you seem to get served ads online for products you bought in physical stores? That’s not because Facebook is eavesdropping on your phone. It’s done via what’s known as “data onboarding,” where personal data like your name, address, or phone number (which retailers know through loyalty-card programs and the like) are converted into ways to target you online. Middlemen like LiveRamp join online with offline by buying your personal data and then working with publishers—email newsletters, dating sites—to identify your browser cookies. Don’t sweat the details; the net of all this hackery is a table with your personal data plus a browser cookie or mobile device ID, which allows, say, a pharmacy chain that knows your phone number (which you entered at checkout to save 5 percent) to link all your purchases to your online presence.
Together, these relatively small players provide an alternative targeting ecosystem that competes with Facebook’s one-stop-shop. If you’re Walgreens, you can use LiveRamp (or its competitors) to target people via real-time ad exchanges. Or you can upload your customers’ contact details to Facebook. The advertiser is agnostic, so long as the pixels reach the right audience.
Here’s why Facebook is better positioned for CCPA, or GDPR: It has a direct relationship with you. How does it know every device you use? Because the first thing you do when you buy a new device is log into Facebook, Instagram, or WhatsApp. How does it know your name, phone number, and address? Because you told it those things, or opted into sharing your location via the Facebook app.
The California and European privacy rules favor these first-party relationships. Data coming from elsewhere—known as third-party data—is viewed with more suspicion, so this privileged state of affairs is unlikely to change soon. So long as Facebook’s apps remain as addictive as they are, Facebook will know who you are, where you are, and every digital pseudonym for you, whether a browser cookie or a mailing address.
You might now be wondering if this approach to advertising was a piece of far-sighted strategy by Facebook, to avoid the inevitable privacy storm. I can state, with some authority since I was at Facebook at the time, that the answer is no. This closed system of identity-matching with minimal data sharing was conjured mostly to assuage the mutual suspicions of Facebook and its advertisers: Advertisers didn’t trust Facebook not to recycle their precious consumer data, and Facebook didn’t trust advertisers not to repurpose its user data. A minimalist data join, with all Facebook data remaining safely within its walls and Facebook not touching often dubious outside data, was the result. It’s just a happy accident (for Facebook) that this is the optimal architecture for weathering privacy regulation like the CCPA and GDPR.
Ultimately, the CCPA is a fatal blow not to Facebook but to the competing middlemen. Shortly before GDPR took effect, Drawbridge announced it was leaving the European market. Then it announced it was leaving advertising altogether. LiveRamp is reported to be up for sale. Facebook itself shut down its Partner Categories program that used targeting segments from data brokers like Acxiom, cutting off its last connection to that world. Under CCPA and GDPR, if you want to target consumers across devices, or use your trove of offline consumer data online, you’ll have to use Facebook instead of the few competitors that once eked out a business outside its walled garden.
It’s as if the privacy activists labored to manufacture a fearsome cannon with which to subdue giants like Facebook and Google, loaded it with a scattershot set of legal restrictions, aimed it at the entire ads ecosystem, and fired it with much commotion. When the smoke cleared, the astonished activists found they’d hit only their small opponents, leaving the giants unharmed. Meanwhile, a grinning Facebook stared back at the activists and their mighty cannon, the weapon that they had slyly helped to design.
The good news is that while the activists missed their big, showy target, they hit the often sketchy data arbitragers who do the real dirty work of the advertising machine. Facebook and Google ultimately are not constrained as much by regulation as by users. The first-party relationship with users that allows these companies relative freedom under privacy laws comes with the burden of keeping those users engaged and returning to the app, despite privacy concerns. Acxiom doesn’t have to care about the perception of consumers—they’re not even aware the company exists. For that reason, these third-party data brokers most need the discipline of regulation. The activists may not have gotten the legal weapon they wanted, but they did get the legal weapon that users deserve.
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Why California's Privacy Law Won't Hurt Facebook or Google
California, that innovative economic juggernaut that so often takes the regulatory lead on matters such as automobile emissions, is once again establishing the ground rules to a vital industry. The California Consumer Privacy Act (CCPA), signed into law by Governor Jerry Brown in June, is the improbable result of a wealthy real estate investor, with the colorful name of Alastair Mactaggart, and a gang of volunteers taking an interest in consumer privacy. Mactaggart used California’s zany ballot initiative system (and his personal fortune) to get a version of a proposed privacy law onto the November ballot. Faced with the horrifying prospect of a well-funded privacy evangelist jamming regulation down the throats of the state’s golden-goose tech companies, legislators quickly devised their own alternative. This rollicking policy adventure is recounted at length in a cover story by Nicholas Confessore for The New York Times Magazine.
Look through the rah-rah triumphalism of the piece, however and you’ll see that far from succumbing to some irresistible activist push, incumbents Google and Facebook craftily shaped the legislation to suit themselves. When in the history of American democracy have state legislators voted to severely and onerously regulate trillion-dollar companies in their home districts, motivated only by an overweening concern for consumer rights (and not donor pressure)? Never, is the answer—which is why the implications of CCPA could use some further scrutiny. (Spoiler alert: Facebook doesn’t hate the law).
Antonio García Martínez (@antoniogm) is an Ideas contributor for WIRED. Previously he worked on Facebook’s early monetization team, where he headed its targeting efforts. His 2016 memoir, Chaos Monkeys, was a New York Times best seller and NPR Best Book of the Year.
First, what the law does.
CCPA resembles a weaker form of Europe’s General Data Protection Regulation, or GDPR, which took effect in May. The California law requires companies to provide an opt-out to data sharing (GDPR required an opt-in), clear statements of what data is being collected or shared with third parties (as does the GDPR), and the right to delete data about yourself. The unique element, and the only one that the tech giants really pushed back on, was a provision granting individuals the right to sue companies for violating their privacy. The clause was effectively neutered when a political compromise limited the right to cases of egregious data loss or theft.
This resemblance to GDPR, if you’re a privacy activist, is more bug than feature: Companies like Facebook and Google already comply with GDPR (or comply as much as anyone) and have extended those GDPR protections to US users. When the CCPA takes effect on January 1, 2020, the average Facebook user will likely not notice.
To understand why the CCPA won’t impact Facebook in any meaningful way requires understanding (at a high level, not to worry) how Facebook’s ads ecosystem treats data and outside partners. Unlike much of the ad-tech world, Facebook lives in a walled garden where no data leaves and very little enters. When an advertiser wants to retarget you, it exchanges your contact information with Facebook, both sides agreeing to a pseudonym for you, before placing you in one or more targeting buckets (“shoe shoppers,” for example). For Facebook’s most powerful and invasive micro-targeting, almost no data is shared between advertiser and publisher, and data middlemen are largely absent. Which is why, if you download your data from Facebook, the juiciest information is in the least remarkable section: “Advertisers Who Uploaded a Contact List With Your Information.” Users and journalists fixate on the supposed creepiness of Facebook having a call log for you, for example, but the real targeters are buried in that list of companies sharing contact information. The CCPA won’t change this.
So who is impacted by the CCPA?
Primarily, companies you’ve never heard of like Drawbridge and LiveRamp (now owned by Acxiom, another company you’ve never heard of, but which knows everything about you). Drawbridge, using data that it managed to beg or borrow, like your IP address or GPS-derived location, figures out all the devices you own. Why? So that an online retailer that notices you browsing for a new handbag on your work computer can serve you an ad for that handbag on your mobile device on your commute home. Such “cross-device targeting and attribution” is one of the holy grails of modern digital advertising.
What does LiveRamp do? Ever notice how you seem to get served ads online for products you bought in physical stores? That’s not because Facebook is eavesdropping on your phone. It’s done via what’s known as “data onboarding,” where personal data like your name, address, or phone number (which retailers know through loyalty-card programs and the like) are converted into ways to target you online. Middlemen like LiveRamp join online with offline by buying your personal data and then working with publishers—email newsletters, dating sites—to identify your browser cookies. Don’t sweat the details; the net of all this hackery is a table with your personal data plus a browser cookie or mobile device ID, which allows, say, a pharmacy chain that knows your phone number (which you entered at checkout to save 5 percent) to link all your purchases to your online presence.
Together, these relatively small players provide an alternative targeting ecosystem that competes with Facebook’s one-stop-shop. If you’re Walgreens, you can use LiveRamp (or its competitors) to target people via real-time ad exchanges. Or you can upload your customers’ contact details to Facebook. The advertiser is agnostic, so long as the pixels reach the right audience.
Here’s why Facebook is better positioned for CCPA, or GDPR: It has a direct relationship with you. How does it know every device you use? Because the first thing you do when you buy a new device is log into Facebook, Instagram, or WhatsApp. How does it know your name, phone number, and address? Because you told it those things, or opted into sharing your location via the Facebook app.
The California and European privacy rules favor these first-party relationships. Data coming from elsewhere—known as third-party data—is viewed with more suspicion, so this privileged state of affairs is unlikely to change soon. So long as Facebook’s apps remain as addictive as they are, Facebook will know who you are, where you are, and every digital pseudonym for you, whether a browser cookie or a mailing address.
You might now be wondering if this approach to advertising was a piece of far-sighted strategy by Facebook, to avoid the inevitable privacy storm. I can state, with some authority since I was at Facebook at the time, that the answer is no. This closed system of identity-matching with minimal data sharing was conjured mostly to assuage the mutual suspicions of Facebook and its advertisers: Advertisers didn’t trust Facebook not to recycle their precious consumer data, and Facebook didn’t trust advertisers not to repurpose its user data. A minimalist data join, with all Facebook data remaining safely within its walls and Facebook not touching often dubious outside data, was the result. It’s just a happy accident (for Facebook) that this is the optimal architecture for weathering privacy regulation like the CCPA and GDPR.
Ultimately, the CCPA is a fatal blow not to Facebook but to the competing middlemen. Shortly before GDPR took effect, Drawbridge announced it was leaving the European market. Then it announced it was leaving advertising altogether. LiveRamp is reported to be up for sale. Facebook itself shut down its Partner Categories program that used targeting segments from data brokers like Acxiom, cutting off its last connection to that world. Under CCPA and GDPR, if you want to target consumers across devices, or use your trove of offline consumer data online, you’ll have to use Facebook instead of the few competitors that once eked out a business outside its walled garden.
It’s as if the privacy activists labored to manufacture a fearsome cannon with which to subdue giants like Facebook and Google, loaded it with a scattershot set of legal restrictions, aimed it at the entire ads ecosystem, and fired it with much commotion. When the smoke cleared, the astonished activists found they’d hit only their small opponents, leaving the giants unharmed. Meanwhile, a grinning Facebook stared back at the activists and their mighty cannon, the weapon that they had slyly helped to design.
The good news is that while the activists missed their big, showy target, they hit the often sketchy data arbitragers who do the real dirty work of the advertising machine. Facebook and Google ultimately are not constrained as much by regulation as by users. The first-party relationship with users that allows these companies relative freedom under privacy laws comes with the burden of keeping those users engaged and returning to the app, despite privacy concerns. Acxiom doesn’t have to care about the perception of consumers—they’re not even aware the company exists. For that reason, these third-party data brokers most need the discipline of regulation. The activists may not have gotten the legal weapon they wanted, but they did get the legal weapon that users deserve.