Government

The Pentagon pushes back on Huawei ban in bid for ‘balance’

Posted by | Google, Government, hardware, huawei, Mobile | No Comments

Huawei may have just found itself an ally in the most unexpected of places. According to a new report out of The Wall Street Journal, both the Defense and Treasury Departments are pushing back on a Commerce Department-led ban on sales from the embattled Chinese hardware giant.

That move, in turn, has reportedly led Commerce Department officials to withdraw a proposal set to make it even more difficult for U.S.-based companies to work with Huawei.

Defense Secretary Mark Esper struck a fittingly pragmatic tone while speaking with the paper, noting, “We have to be conscious of sustaining those [technology] companies’ supply chains and those innovators. That’s the balance we have to strike.”

Huawei, already under fire for allegations of flouting sanctions with other countries, has become a centerpiece of a simmering trade war between the Trump White House and China. The smartphone maker has been barred from selling 5G networking equipment due to concerns over its close ties to the Chinese government.

Last year, meanwhile, the government barred Huawei from utilizing software and components from U.S.-based companies, including Google. Huawei is also expected to be a key talking point in upcoming White House discussions, as officials weigh actions against the repercussions they’ll ultimately have for U.S. partners.

The Commerce Department has yet to offer any official announcement related to the report.

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Marijuana delivery giant Eaze may go up in smoke

Posted by | Apps, eaze, eCommerce, funding, Government, Logistics, marijuana, meadow, Mobile, payments, Recent Funding, Startups, TC, Transportation, weed delivery | No Comments

The first cannabis startup to raise big money in Silicon Valley is in danger of burning out. TechCrunch has learned that pot delivery middleman Eaze has seen unannounced layoffs, and its depleted cash reserves threaten its ability to make payroll or settle its AWS bill. Eaze was forced to raise a bridge round to keep the lights on as it prepares to attempt a major pivot to “touching the plant” by selling its own marijuana brands through its own depots.

TechCrunch spoke with nine sources with knowledge of Eaze’s struggles to piece together this report. If Eaze fails, it could highlight serious growing pains amid the “green rush” of startups into the marijuana business.

Eaze, the startup backed by some $166 million in funding that once positioned itself as the “Uber of pot” — a marketplace selling pot and other cannabis products from dispensaries and delivering it to customers — has recently closed a $15 million bridge round, according to multiple sources. The funding was meant to keep the lights on as Eaze struggles to raise its next round of funding amid problems with making decent margins on its current business model, lawsuits, payment processing issues and internal disorganization.

 

An Eaze spokesperson confirmed that the company is low on cash. Sources tell us that the company, which laid off some 30 people last summer, is preparing another round of cuts in the meantime. The spokesperson refused to discuss personnel issues, but noted that there have been layoffs at many late-stage startups as investors want to see companies cut costs and become more efficient.

From what we understand, Eaze is currently trying to raise a $35 million Series D round, according to its pitch deck. The $15 million bridge round came from unnamed current investors. (Previous backers of the company include 500 Startups, DCM Ventures, Slow Ventures, Great Oaks, FJ Labs, the Winklevoss brothers and a number of others.) Originally, Eaze had tried to raise a $50 million Series D, but the investor that was looking at the deal, Athos Capital, is said to have walked away at the eleventh hour.

Eaze is going into the fundraising with an enterprise value of $388 million, according to company documents reviewed by TechCrunch. It’s not clear what valuation it’s aiming for in the next round.

An Eaze spokesperson declined to discuss fundraising efforts, but told TechCrunch, “The company is going through a very important transition right now, moving to becoming a plant-touching company through acquisitions of former retail partners that will hopefully allow us to more efficiently run the business and continue to provide good service to customers.”

Desperate to grow margins

The news comes as Eaze is hoping to pull off a “verticalization” pivot, moving beyond online storefront and delivery of third-party products (rolled joints, flower, vaping products and edibles) and into sourcing, branding and dispensing the product directly. Instead of just moving other company’s marijuana brands between third-party dispensaries and customers, it wants to sell its own in-house brands through its own delivery depots to earn a higher margin. With a number of other cannabis companies struggling, the hope is that it will be able to acquire at low prices brands in areas like marijuana flower, pre-rolled joints, vaporizer cartridges or edibles.

An Eaze spokesperson confirmed that the company plans to announce the pivot in the coming days, telling TechCrunch that it’s “a pretty significant change from provider of services to operating in that fashion but also operating a depot directly ourselves.”

The startup is already making moves in this direction, and is in the process of acquiring some of the assets of a bankrupt cannabis business out of Canada called Dionymed — which had initially been a partner of Eaze’s, then became a competitor, and then sued it over payment disputes, before finally selling part of its business. These assets are said to include Oakland dispensary Hometown Heart, which it acquired in an all-share transaction (“Eaze effectively bought the lawsuit,” is how one source described the sale). This will become Eaze’s first owned delivery depot.

In a recent presentation deck that Eaze has been using when pitching to investors — which has been obtained by TechCrunch — the company describes itself as the largest direct-to-consumer cannabis retailer in California. It has completed more than 5 million deliveries, served 600,000 customers and tallied up an average transaction value of $85. 

To date, Eaze has only expanded to one other state beyond California (Oregon). Its aim is to add five more states this year, and another three in 2021. But the company appears to have expected more states to legalize recreational marijuana sooner, which would have provided geographic expansion. Eaze seems to have overextended itself too early in hopes of capturing market share as soon as it became available.

An employee at the company tells us that on a good day Eaze can bring in between $800,000 and $1 million in net revenue, which sounds great, except that this is total merchandise value, before any cuts to suppliers and others are made. Eaze makes only a fraction of that amount, one reason why it’s now looking to verticatlize into more of a primary role in the ecosystem. And that’s before considering all of the costs associated with running the business. 

Eaze is suffering from a problem rampant in the marijuana industry: a lack of working capital. Because banks often won’t issue working capital loans to weed-related business, deliverers like Eaze can experience delays in paying back vendors. Another source says late payments have pushed some brands to stop selling through Eaze.

Another drain on its finances has been its marketing efforts. A source said out-of-home ads (billboards and the like) allegedly were a significant expense at one point. It has to compete with other pot-purchasing options like visiting retail stores in person, using dispensaries’ in-house delivery services or buying via startups like Meadow that act as aggregated online points of sale for multiple dispensaries.

Indeed, Eaze claims that its pivot into verticalization will bring it $204 million in revenues on gross transactions of $300 million. It notes in the presentation that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in “private label” products and has more depot control.

Selling weed isn’t eazy

The poor margins are only one of the problems with Eaze’s current business model, which the company admits in its presentation have led to an inconsistent customer experience and poor customer affinity with its brand — especially in the face of competition from a number of other delivery businesses.  

Playing on the on-demand, delivery-of-everything theme, it connected with two customer bases. First, existing cannabis consumers already using some form of delivery service for their supply; and a newer, more mainstream audience with disposable income that had become more interested in cannabis-related products but might feel less comfortable walking into a dispensary, or buying from a black market dealer.

It is not the only startup that has been chasing that audience. Other competitors in the wider market for cannabis discovery, distribution and sales include Weedmaps, Puffy, Blackbird, Chill (a brand from Dionymed that it founded after ending its earlier relationship with Eaze), and Meadow, with the wider industry estimated to be worth some $11.9 billion in 2018 and projected to grow to $63 billion by 2025.

Eaze was founded on the premise that the gradual decriminalization of pot — first making it legal to buy for medicinal use, and gradually for recreational use — would spread across the U.S. and make the consumption of cannabis-related products much more ubiquitous, presenting a big opportunity for Eaze and other startups like it. 

It found a willing audience among consumers, but also tech workers in the Bay Area, a tight market for recruitment. 

“I was excited for the opportunity to join the cannabis industry,” one source said. “It has for the most part gotten a bad rap, and I saw Eaze’s mission as a noble thing, and the team seemed like good people.”

Eaze CEO Ro Choy

That impression was not to last. The company, this employee was told when joining, had plenty of funding with more on the way. The newer funding never materialized, and as Eaze sought to figure out the best way forward, the company cycled through different ideas and leadership: former Yammer executive Keith McCarty, who co-founded the company with Roie Edery (both are now founders at another cannabis startup, Wayv), left, and the CEO role was given to another ex-Yammer executive, Jim Patterson, who was then replaced by Ro Choy, who is the current CEO. 

“I personally lost trust in the ability to execute on some of the vision once I got there,” the ex-employee said. “I thought that on one hand a picture was painted that wasn’t the truth. As we got closer and as I’d been there longer and we had issues with funding, the story around why we were having issues kept changing.” Several sources familiar with its business performance and culture referred to Eaze as a “shitshow.”

No ‘Push for Kush’

The quick shifts in strategy were a recurring pattern that started well before the company got into tight financial straits. 

One employee recalled an acquisition Eaze made several years ago of a startup called Push for Pizza. Founded by five young friends in Brooklyn, Push for Pizza had gone viral over a simple concept: you set up your favorite pizza order in the app, and when you want it, you pushed a single button to order it. (Does that sound silly? Don’t forget, this was also the era of Yo, which was either a low point for innovation, or a high point for cynicism when it came to average consumer intelligence… maybe both.)

Eaze’s idea, the employee said, was to take the basics of Push for Pizza and turn it into a weed app, Push for Kush. In it, customers could craft their favorite mix and, at the touch of a button, order it, lowering the procurement barrier even more.

The company was very excited about the deal and the prospect of the new app. They planned a big campaign to spread the word, and held an internal event to excite staff about the new app and business line. 

“They had even made a movie of some kind that they showed us, featuring a caricature of Jim” — the CEO at a the time — “hanging out of the sunroof of a limo.” (We found the opening segment of this video online, and the Twitter and Instagram accounts that had been created for Push for Kush, but no more than that.)

Then just one week later, the whole plan was scrapped, and the founders of Push for Pizza fired. “It was just brushed under the carpet,” the former employee said. “No one could get anything out of management about what had happened.”

Something had happened, though: The company had been taking payments by card when it made the acquisition, but the process was never stable and by then it had recently gone back to the cash-only model. Push for Kush by cash was less appealing. “They didn’t think it would work,” the person said, adding that this was the normal course of business at the startup. “Big initiatives would just die in favor of pushing out whatever new thing was on the product team’s radar.” 

Eaze’s spokesperson confirmed that “we did acquire Push for Pizza . . but ultimately didn’t choose to pursue [launching Push for Kush].”

Payments were a recurring issue for the startup. Eaze started out taking payments only in cash — but as the business grew, that became increasingly problematic. The company found itself kicked off the credit card networks and was stuck with a less traceable, more open to error (and theft) cash-only model at a time when one employee estimated it was bringing in between $800,000 and $1 million per day in sales. 

Eventually, it moved to cards, but not smoothly: Visa specifically did not want Eaze on its platform. Eaze found a workaround, employees say, but it was never above board, which became the subject of the lawsuit between Eaze and Dionymed. Currently the company appears to only take payments via debit cards, ACH transfer and cash, not credit card.

Another incident sheds light on how the company viewed and handled security issues. 

Can Eaze rise from the ashes?

At one point, employees allegedly discovered that Eaze was essentially storing all of its customer data — including users’ signatures and other personal information — in an Azure bucket that was not secured, meaning that if anyone was nosing around, it could be easily discovered and exploited.

The vulnerability was brought to the company’s attention. It was something that was up to product to fix, but the job was pushed down the list. It ultimately took seven months to patch this up. “I just kept seeing things with all these huge holes in them, just not ready for prime time,” one ex-employee said of the state of products. “No one was listening to engineers, and no one seemed to be looking for viable products.” Eaze’s spokesperson confirms a vulnerability was discovered but claims it was promptly resolved.

Today, the issue is a more pressing financial one: The company is running out of money. Employees have been told the company may not make its next payroll, and AWS will shut down its servers in two days if it doesn’t pay up. 

Eaze’s spokesperson tried to remain optimistic while admitting the dire situation the company faces. “Eaze is going to continue doing everything we can to support customers and the overall legal cannabis industry. We’re excited about the future and acknowledge the challenges that the entire community is facing.”

As medicinal and recreational marijuana access became legal in some states in the latter 2010s, entrepreneurs and investors flocked to the market. They saw an opportunity to capitalize on the end of a major prohibition — a once in a lifetime event. But high government taxes, enduring black markets, intense competition and a lack of financial infrastructure willing to deal with any legal haziness have caused major setbacks.

While the pot business might sound chill, operations like Eaze depend on coordinating high-stress logistics with thin margins and little room for error. Plenty of food delivery startups, from Sprig to Munchery, went under after running into similar struggles, and at least banks and payment processors would work with them. With the odds stacked against it, Eaze has a tough road ahead.

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US patents hit record 333,530 granted in 2019; IBM, Samsung (not the FAANGs) lead the pack

Posted by | 3 D, Amazon, Amazon Technologies Inc., Android, apple inc, AT&T, biotechnology, car, China, Companies, CRISPR, EMC, Germany, Government, Hewlett-Packard Enterprise, huawei, IBM, industries, Japan, lawsuit, Microsoft, mpeg la, Netflix, oracle, Panasonic, patents, printing, Qualcomm, quantum computing, Samsung, Samsung Electronics, south korea, technology trends, telecommunications, United States | No Comments

We may have moved on from a nearly-daily cycle of news involving tech giants sparring in courts over intellectual property infringement, but patents continue to be a major cornerstone of how companies and people measure their progress and create moats around the work that they have done in hopes of building that into profitable enterprises in the future. IFI Claims, a company that tracks patent activity in the US, released its annual tally of IP work today underscoring that theme: it noted that 2019 saw a new high-watermark of 333,530 patents granted by the US Patent and Trademark Office.

The figures are notable for a few reasons. One is that this is the most patents ever granted in a single year; and the second that this represents a 15% jump on a year before. The high overall number speaks to the enduring interest in safeguarding IP, while the 15% jump has to do with the fact that patent numbers actually dipped last year (down 3.5%) while the number that were filed and still in application form (not granted) was bigger than ever. If we can draw something from that, it might be that filers and the USPTO were both taking a little more time to file and process, not a reduction in the use of patents altogether.

But patents do not tell the whole story in another very important regard.

Namely, the world’s most valuable, and most high profile tech companies are not always the ones that rank the highest in patents filed.

Consider the so-called FAANG group, Facebook, Apple, Amazon, Netflix and Google: Facebook is at number-36 (one of the fastest movers but still not top 10) with 989 patents; Apple is at number-seven with 2,490 patents; Amazon is at number-nine with 2,427 patents; Netflix doesn’t make the top 50 at all; and the Android, search and advertising behemoth Google is merely at slot 15 with 2,102 patents (and no special mention for growth).

Indeed, the fact that one of the oldest tech companies, IBM, is also the biggest patent filer almost seems ironic in that regard.

As with previous years — the last 27, to be exact — IBM has continued to hold on to the top spot for patents granted, with 9,262 in total for the year. Samsung Electronics, at 6,469, is a distant second.

These numbers, again, don’t tell the whole story: IFI Claims notes that Samsung ranks number-one when you consider all active patent “families”, which might get filed across a number of divisions (for example a Samsung Electronics subsidiary filing separately) and count the overall number of patents to date (versus those filed this year). In this regard, Samsung stands at 76,638, with IBM the distant number-two at 37,304 patent families.

Part of this can be explained when you consider their businesses: Samsung makes a huge range of consumer and enterprise products. IBM, on the other hand, essentially moved out of the consumer electronics market years ago and these days mostly focuses on enterprise and B2B and far less hardware. That means a much smaller priority placed on that kind of R&D, and subsequent range of families.

Two other areas that are worth tracking are biggest movers and technology trends.

In the first of these, it’s very interesting to see a car company rising to the top. Kia jumped 58 places and is now at number-41 (921 patents) — notable when you think about how cars are the next “hardware” and that we are entering a pretty exciting phase of connected vehicles, self-driving and alternative energy to propel them.

Others rounding out fastest-growing were Hewlett Packard Enterprise, up 28 places to number-48 (794 patents); Facebook, up 22 places to number-36 (989 patents); Micron Technology, up nine places to number-25 (1,268), Huawei, up six places to number-10 (2,418), BOE Technology, up four places to number-13 (2,177), and Microsoft, up three places to number-4 (3,081 patents).

In terms of technology trends, IFI looks over a period of five years, where there is now a strong current of medical and biotechnology innovation running through the list right now, with hybrid plant creation topping the list of trending technology, followed by CRISPR gene-editing technology, and then medicinal preparations (led by cancer therapies). “Tech” in the computer processor sense only starts at number-four with dashboards and other car-related tech; with quantum computing, 3-D printing and flying vehicle tech all also featuring.

Indeed, if you have wondered if we are in a fallow period of innovation in mobile, internet and straight computer technology… look no further than this list to prove out that thought.

Unsurprisingly, US companies account for 49% of U.S. patents granted in 2019 up from 46 percent a year before. Japan accounts for 16% to be the second-largest, with South Korea at 7% (Samsung carrying a big part of that, I’m guessing), and China passing Germany to be at number-four with 5%.

  1. International Business Machines Corp 9262
  2. Samsung Electronics Co Ltd 6469
  3. Canon Inc 3548
  4. Microsoft Technology Licensing LLC 3081
  5. Intel Corp 3020
  6. LG Electronics Inc 2805
  7. Apple Inc 2490
  8. Ford Global Technologies LLC 2468
  9. Amazon Technologies Inc 2427
  10. Huawei Technologies Co Ltd 2418
  11. Qualcomm Inc 2348
  12. Taiwan Semiconductor Manufacturing Co TSMC Ltd 2331
  13. BOE Technology Group Co Ltd 2177
  14. Sony Corp 2142
  15. Google LLC 2102
  16. Toyota Motor Corp 2034
  17. Samsung Display Co Ltd 1946
  18. General Electric Co 1818
  19. Telefonaktiebolaget LM Ericsson AB 1607
  20. Hyundai Motor Co 1504
  21. Panasonic Intellectual Property Management Co Ltd 1387
  22. Boeing Co 1383
  23. Seiko Epson Corp 1345
  24. GM Global Technology Operations LLC 1285
  25. Micron Technology Inc 1268
  26. United Technologies Corp 1252
  27. Mitsubishi Electric Corp 1244
  28. Toshiba Corp 1170
  29. AT&T Intellectual Property I LP 1158
  30. Robert Bosch GmbH 1107
  31. Honda Motor Co Ltd 1080
  32. Denso Corp 1052
  33. Cisco Technology Inc 1050
  34. Halliburton Energy Services Inc 1020
  35. Fujitsu Ltd 1008
  36. Facebook Inc 989
  37. Ricoh Co Ltd 980
  38. Koninklijke Philips NV 973
  39. EMC IP Holding Co LLC 926
  40. NEC Corp 923
  41. Kia Motors Corp 921
  42. Texas Instruments Inc 894
  43. LG Display Co Ltd 865
  44. Oracle International Corp 847
  45. Murata Manufacturing Co Ltd 842
  46. Sharp Corp 819
  47. SK Hynix Inc 798
  48. Hewlett Packard Enterprise Development LP 794
  49. Fujifilm Corp 791
  50. LG Chem Ltd 791

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Zuckerberg ditches annual challenges, but needs cynics to fix 2030

Posted by | Apps, augmented reality, Facebook, Facebook Augmented Reality, Facebook Policy, Facebook Regulation, Government, Health, Mark Zuckerberg, Mobile, Oculus, Personnel, Policy, privacy, remote work, Social, TC | No Comments

Mark Zuckerberg won’t be spending 2020 focused on wearing ties, learning Mandarin or just fixing Facebook. “Rather than having year-to-year challenges, I’ve tried to think about what I hope the world and my life will look in 2030,” he wrote today on Facebook. As you might have guessed, though, Zuckerberg’s vision for an improved planet involves a lot more of Facebook’s family of apps.

His biggest proclamations in today’s notes include that:

  • AR – Phones will remain the primary computing platform for most of the decade but augmented reality could get devices out from between us so we can be present together — Facebook is building AR glasses
  • VR – Better virtual reality technology could address the housing crisis by letting people work from anywhere — Facebook is building Oculus
  • Privacy – The internet has created a global community where people find it hard to establish themselves as unique, so smaller online groups could make people feel special again — Facebook is building more private groups and messaging options
  • Regulation – The big questions facing technology are too thorny for private companies to address by themselves, and governments must step in around elections, content moderation, data portability and privacy — Facebook is trying to self-regulate on these and everywhere else to deter overly onerous lawmaking

Zuckerberg Elections

These are all reasonable predictions and suggestions. However, Zuckerberg’s post does little to address how the broadening of Facebook’s services in the 2010s also contributed to a lot of the problems he presents:

  • Isolation – Constant passive feed scrolling on Facebook and Instagram has created a way to seem like you’re being social without having true back-and-forth interaction with friends
  • Gentrification – Facebook’s shuttled employees have driven up rents in cities around the world, especially the Bay Area
  • Envy – Facebook’s algorithms can make anyone without a glamorous, Instagram-worthy life look less important, while hackers can steal accounts and its moderation systems can accidentally suspend profiles with little recourse for most users
  • Negligence – The growth-first mentality led Facebook’s policies and safety to lag behind its impact, creating the kind of democracy, content, anti-competition and privacy questions it’s now asking the government to answer for it

Noticeably absent from Zuckerberg’s post are explicit mentions of some of Facebook’s more controversial products and initiatives. He writes about “decentralizing opportunity” by giving small businesses commerce tools, but never mentions cryptocurrency, blockchain or Libra directly. Instead he seems to suggest that Instagram store fronts, Messenger customer support and WhatsApp remittance might be sufficient. He also largely leaves out Portal, Facebook’s smart screen that could help distant families stay closer, but that some see as a surveillance and data collection tool.

I’m glad Zuckerberg is taking his role as a public figure and the steward of one of humanity’s fundamental utilities more seriously. His willingness to even think about some of these long-term issues instead of just quarterly profits is important. Optimism is necessary to create what doesn’t exist.

Still, if Zuckerberg wants 2030 to look better for the world, and for the world to look more kindly on Facebook, he may need to hire more skeptics and cynics that see a dystopic future instead — people who understand human impulses toward greed and vanity. Their foresight on where societal problems could arise from Facebook’s products could help temper Zuckerberg’s team of idealists to create a company that balances the potential of the future with the risks to the present.

Every new year of the last decade I set a personal challenge. My goal was to grow in new ways outside my day-to-day work…

Posted by Mark Zuckerberg on Thursday, January 9, 2020

For more on why Facebook can’t succeed on idealism alone, read:

 

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Twitter’s new reply blockers could let Trump hide critics

Posted by | Apps, bullying, CES 2020, donald trump, Free Speech, Government, Mobile, Policy, Social, TC, Twitter, twitter safety | No Comments

What if politicians could only display Twitter replies from their supporters while stopping everyone else from adding their analysis to the conversation? That’s the risk of Twitter’s upcoming Conversation Participants tool it’s about to start testing that lets you choose if you want replies from everyone, only those your follow or mention or no one.

For most, the reply limiter could help repel trolls and harassment. Unfortunately, it still puts the burden of safety on the victims rather than the villains. Instead of routing out abusers, Twitter wants us to retreat and wall off our tweets from everyone we don’t know. That could reduce the spontaneous yet civil reply chains between strangers that are part of what makes Twitter so powerful.

But in the hands of politicians hoping to avoid scrutiny, the tools could make it appear that their tweets and policies are uniformly supported. By only allowing their sycophants to add replies below their posts, anyone reading along will be exposed to a uniformity of opinion that clashes with Twitter’s position as a marketplace of ideas.

We’ve reached out to Twitter for comment on this issue and whether anyone such as politicians would be prevented from using the new reply-limiting tools. Twitter plans to test the reply-selection tool in Q1, monitor usage, and make modifications if necessary before rolling it out. The company provided this statement:

We want to help people feel safe participating in the conversation on Twitter by giving them more control over the conversations they start. We’ll be experimenting with different options for who can reply to Tweets in early 2020.”

Here’s how the new Conversation Participants feature works, according to the preview shared by Twitter’s Suzanne Xie at CES today, though it could change during testing. When users go to tweet, they’ll have the option of selecting who can reply, unlike now when everyone can leave replies but authors can hide certain ones that viewers can opt to reveal. Conversation Participants offers four options:

Global: Replies from anyone

Group: Replies from those you follow or mention in this tweet

Panel: Replies from only those you mention in this tweet

Statement: No replies allowed

Now imagine President Trump opts to make all of his tweets Group-only. Only those who support him and he therefore follows — like his sons, Fox News’ Sean Hannity and his campaign team — could reply. Gone would be the reels of critics fact-checking his statements or arguing against his policies. His tweets would be safeguarded from reproach, establishing an echo chamber filter bubble for his acolytes.

It’s true that some of these responses from the public might constitute abuse or harassment. But those should be dealt with specifically through strong policy and consistent enforcement of adequate punishments when rules are broken. By instead focusing on stopping replies from huge swaths of the community, the secondary effects have the potential to prop up politicians that consistently lie and undam the flow of misinformation.

There’s also the practical matter that this won’t stop abuse, it will merely move it. Civil discussion will be harder to find for the rest of the public, but harassers will still reach their targets. Users blocked from replying to specific tweets can just tweet directly at the author. They can also continue to mention the author separately or screenshot their tweets and then discuss them.

It’s possible that U.S. law prevents politicians discriminating against citizens with different viewpoints by restricting their access to the politician’s comments on a public forum. Judges ruled this makes it illegal for Trump to block people on social media. But with this new tool, because anyone could still see the tweets, reply to the author separately and not be followed by the author likely doesn’t count as discrimination like blocking does, use of the Conversation Participants tool could be permissible. Someone could sue to push the issue to the courts, though, and judges might be wise to deem this unconstitutional.

Again, this is why Twitter needs to refocus on cleaning up its community rather than only letting people build tiny, temporary shelters from the abuse. It could consider blocking replies and mentions from brand new accounts without sufficient engagement or a linked phone number, as I suggested in 2017. It could also create a new mid-point punishment of a “time-out” from sending replies for harassment that it (sometimes questionably) deems below the threshold of an account suspension.

The combination of Twitter’s decade of weakness in the face of trolls with a new political landscape of normalized misinformation threaten to overwhelm its attempts to get a handle on safety.

CES 2020 coverage - TechCrunch

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TRACED Act signed into law, putting robocallers on notice

Posted by | Government, Mobile, robocalls | No Comments

The Pallone-Thrune TRACED Act, a bipartisan bit of legislation that should make life harder for the villains behind robocalls, was signed into law today by the president. It’s still possible to get things done in D.C. after all!

We’ve covered the TRACED Act several times previously, as robocalls are, in addition to being horribly annoying, a uniquely annoying high-tech threat. Using clever targeting and spoofing technology, scammers are placing millions of calls that at best irritate and at worst take advantage of the vulnerable.

The new law won’t end that practice overnight, but it does add some useful tools to regulators’ toolboxes. Here’s how I summarized the bill’s provisions earlier this month:

  • Extends FCC’s statute of limitations on robocall offenses and increases potential fines
  • Requires an FCC rulemaking helping protect consumers from spam calls and texts (this is already underway)
  • Requires annual FCC report on robocall enforcement and allows for it to formally recommend legislation
  • Requires adoption on a reasonable timeline of the STIR/SHAKEN framework for preventing call spoofing
  • Prevents carriers from charging for the above service, and shields them from liability for reasonable mistakes
  • Requires the attorney general to convene an interagency task force to look at prosecution of offenders
  • Opens the door to Justice Department prosecution of offenders
  • Establishes a handful of specific cutouts and studies to make sure the rules work and interested parties are giving feedback

Senate Minority Leader Chuck Schumer (D-NY) took a break from other business to laud the enactment of the law:

Americans were battered by 48 billion robocalls last year.

I get them, too. I hate them. They need to stop.

I’m so proud I fought for the #TRACEDact to protect Americans from these annoying, persistent, & dangerous calls.

And I’m so proud it’s now law.https://t.co/HgNjuRiQXe

— Chuck Schumer (@SenSchumer) December 31, 2019

And FCC Chairman Ajit Pai’s praise was effusive in a statement his office sent along:

I applaud Congress for working in a bipartisan manner to combat illegal robocalls and malicious caller ID spoofing.  And I thank the President and Congress for the additional tools and flexibility that this law affords us.  Specifically, I am glad that the agency now has a longer statute of limitations during which we can pursue scammers and I welcome the removal of a previously-required warning we had to give to unlawful robocallers before imposing tough penalties.

And I thank the American people for never letting us forget how fed up they are with scam, spoofed robocalls.  It’s their voices that power our never-ceasing push to fight back against the scourge of robocalls and malicious spoofing.

Of course the new law isn’t a magic wand; The FCC is still limited in what it can do and how quickly it can act. Even major fines like this $120 million one have had a negligible effect on the nefarious industry. “Like emptying the ocean with a teaspoon,” said Commissioner Jessica Rosenworcel at the time.

Here’s hoping the TRACED Act amounts to more than a bigger spoon. We’ll find out as regulators and the mobile industry grow into their new capabilities and begin the long process of actually applying them to the problem. It may take months or more to see any real abatement, but at least we’re taking concrete steps.

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Vape lung is on the decline as CDC report fixes blame on oily additive

Posted by | cdc, Gadgets, Government, Health, vape lung, vaping | No Comments

The CDC has issued a set of reports showing that the lung disease associated with vaping seems to be declining from peak rates, and that Vitamin E acetate seems — as speculated early on — to be the prime suspect for the epidemic. The affliction has cost at least 54 lives and affected 2,506 people across the nation.

The condition now officially known as EVALI (E-cigarette, or Vaping, Product Use-Associated Lung Injury) appeared over the summer, with hundreds of people reporting chest pains, shortness of breath and other symptoms. When state medical authorities and the CDC began comparing notes, it became clear that vaping was the common theme between the cases — especially using THC products.

Before long the CDC recommended ceasing all vape product usage and was collating reports and soliciting samples from around the country. Their medical authorities have now issued several reports on the disease. The most significant finding echoes earlier indications that Vitamin E acetate, an oily substance that was apparently being used as a cutting agent in low-quality vaping cartridges, is at the very least a major contributor to the condition:

Building upon a previous study, CDC analyzed bronchoalveolar lavage (BAL) fluid from a larger number of EVALI patients from 16 states and compared them to BAL fluid from healthy people. Vitamin E acetate, also found in product samples tested by the FDA and state laboratories, was identified in BAL fluid from 48 of 51 EVALI patients and was not found in any of the BAL fluids of healthy people.

That’s pretty clear cut, but importantly it does not exonerate any other, perhaps even worse additives that may not have been so widespread. It seems clear that vaping product producers will need to reestablish trust in the wake of this fatal blunder, and part of that will have to be transparency and regulation.

Vaping rose to prominence quickly and has proven difficult to effectively regulate. The shady companies that were selling stamped-on cartridges filled with what would prove to be a lethal adulterant have probably already picked up and moved on to the next scam.

The good news is the scale of the epidemic seems to have reached its maximum. There are still cases coming in, but the number of new patients is not rising sharply every month. Perhaps this indicates that people are taking the CDC’s advice and not vaping as much or at all, or perhaps the products using the additive have been quietly slipped off the market.

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Robocall-crushing TRACED act passes Senate and heads to Oval Office

Posted by | FCC, Government, Mobile, robocalls | No Comments

Somehow during all the partisan furor of the last few days, the Senate found a moment to vote some bipartisan legislation into law — presuming, of course, it survives the president’s desk. The TRACED act pushes carriers to kill robocalls before they ring, and gives the FCC some extra juice to pursue the wicked ones perpetrating them.

“We’re delighted the Senate acted quickly to pass this legislation to shutdown illegal robocalls,” wrote the bill’s co-sponsors in the House Energy and Commerce Committee, in a statement. “We’re working hard to help the American people get real relief from these relentless and illegal calls. We look forward to the President signing this overwhelmingly bipartisan legislation into law very soon.”

Unlike many things called bipartisan, this one really is. Two different versions of the bill originated in the House and Senate and were passed individually with overwhelming majorities. The pertinent committees put their heads together and created a unified version of the bill they could both live with. Amazingly, that was just last month, and now the bill is off to the White House for the Executive signature.

You can read a summary of what the bill does here, but I’ll summarize further:

  • Extends FCC’s statute of limitations on robocall offenses and increases potential fines
  • Requires an FCC rulemaking helping protect consumers from spam calls and texts (this is already underway)
  • Requires annual FCC report on robocall enforcement and allows for it to formally recommend legislation
  • Requires adoption on a reasonable timeline of the STIR/SHAKEN framework for preventing call spoofing
  • Prevents carriers from charging for the above service, and shields them from liability for reasonable mistakes
  • Requires the Attorney General to convene an interagency task force to look at prosecution of offenders
  • Opens the door to Justice Department prosecution of offenders
  • Establishes a handful of specific cutouts and studies to make sure the rules work and interested parties are giving feedback

Overall it seems like a good bill and quite focused on this specific issue — no weird pork attached. Here’s hoping the TRACED act is signed into law quickly.

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Instagram hides false content behind warnings, except for politicians

Posted by | Apps, Facebook, Facebook fact-checking, Government, instagram, instagram ads, Instagram misinformation, Instagram Policy, Mobile, Social, TC | No Comments

Instagram is giving politicians the same free rein to spread misinformation as its parent company Facebook. Instagram is expanding its limited fact-checking test in the U.S. from May and will now work with 45 third-party organizations to assess the truthfulness of photo and video content on its app. Material rated as false will be hidden from the Explore and hashtag pages, and covered with an interstitial warning blocking the content in the feed or Stories until users tap again to see the post.

This goes an important step further than Facebook’s early attempts to append warnings on links alongside content but that still let users immediately consume the misinformation. In October Facebook announced it would use a similar interstitial warning system.

Instagram will use image matching technology to find additional copies of false content and apply the same label, and do this across Facebook and Instagram content. That could become a talking point for Facebook as it tries to dissuade regulators from breaking up the company and spinning off Instagram. On the other hand, it’s a valuable economy of scale for protecting the internet. Breaking up Facebook, Instagram and WhatsApp might lead to worse enforcement through fragmented resources, though it could lead the apps to compete for the best moderation.

Instagram is trying to beef up its safety practices across the board. Today it began alerting users that the caption they’re about to post on a photo or video could be offensive or seen as bullying, offering them a chance to edit the text before they post it. Instagram started doing the same for comments earlier this year. Instagram is also starting to ask new users their age to make sure they’re 13 or older, which I’d previously written it needed to add since it was otherwise feigning ignorance to dodge Child Online Privacy Protection Act violation fines.

One group that’s exempt from the fact checking, though, is politicians. Their original content on Instagram, including ads, will not be sent for fact checks, even if it’s blatantly inaccurate. This aligns with Facebook’s policy that’s received plenty of backlash from critics, including TechCrunch, who say it could let candidates smear their rivals, stoke polarization and raise money through lies. Instagram CEO Adam Mosseri has maintained that banning political ads could hurt challenger candidates in need of promotion, and that it would be tough to draw the lines between political and issue ads.

Instagram is luckily less dangerous in this respect because feed posts can’t directly link out to websites where politicians could raise money. But verified users can attach links to Stories, and everyone can have one link in the profile. That means false information could still be knowingly weaponized by politicians on the app, furthering their campaigns at the expense of truth… and people’s perception that they can believe what they see on Instagram.

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Instagram still doesn’t age-check kids. That must change.

Posted by | Apps, coppa, Education, Facebook, Facebook age policy, Government, instagram, Instagram age policy, Mobile, Opinion, Policy, privacy, Snapchat, Social, TC, tiktok | No Comments

Instagram dodges child safety laws. By not asking users their age upon signup, it can feign ignorance about how old they are. That way, it can’t be held liable for $40,000 per violation of the Child Online Privacy Protection Act. The law bans online services from collecting personally identifiable information about kids under 13 without parental consent. Yet Instagram is surely stockpiling that sensitive info about underage users, shrouded by the excuse that it doesn’t know who’s who.

But here, ignorance isn’t bliss. It’s dangerous. User growth at all costs is no longer acceptable.

It’s time for Instagram to step up and assume responsibility for protecting children, even if that means excluding them. Instagram needs to ask users’ age at sign up, work to verify they volunteer their accurate birthdate by all practical means, and enforce COPPA by removing users it knows are under 13. If it wants to allow tweens on its app, it needs to build a safe, dedicated experience where the app doesn’t suck in COPPA-restricted personal info.

Minimum Viable Responsibility

Instagram is woefully behind its peers. Both Snapchat and TikTok require you to enter your age as soon as you start the sign up process. This should really be the minimum regulatory standard, and lawmakers should close the loophole allowing services to skirt compliance by not asking. If users register for an account, they should be required to enter an age of 13 or older.

Instagram’s parent company Facebook has been asking for birthdate during account registration since its earliest days. Sure, it adds one extra step to sign up, and impedes its growth numbers by discouraging kids to get hooked early on the social network. But it also benefits Facebook’s business by letting it accurately age-target ads.

Most importantly, at least Facebook is making a baseline effort to keep out underage users. Of course, as kids do when they want something, some are going to lie about their age and say they’re old enough. Ideally, Facebook would go further and try to verify the accuracy of a user’s age using other available data, and Instagram should too.

Both Facebook and Instagram currently have moderators lock the accounts of any users they stumble across that they suspect are under 13. Users must upload government-issued proof of age to regain control. That policy only went into effect last year after UK’s Channel 4 reported a Facebook moderator was told to ignore seemingly underage users unless they explicitly declared they were too young or were reported for being under 13. An extreme approach would be to require this for all signups, though that might be expensive, slow, significantly hurt signup rates, and annoy of-age users.

Instagram is currently on the other end of the spectrum. Doing nothing around age-gating seems recklessly negligent. When asked for comment about how why it doesn’t ask users’ ages, how it stops underage users from joining, and if it’s in violation of COPPA, Instagram declined to comment. The fact that Instagram claims to not know users’ ages seems to be in direct contradiction to it offering marketers custom ad targeting by age such as reaching just those that are 13.

Instagram Prototypes Age Checks

Luckily, this could all change soon.

Mobile researcher and frequent TechCrunch tipster Jane Manchun Wong has spotted Instagram code inside its Android app that shows it’s prototyping an age-gating feature that rejects users under 13. It’s also tinkering with requiring your Instagram and Facebook birthdates to match. Instagram gave me a “no comment” when I asked about if these features would officially roll out to everyone.

Code in the app explains that “Providing your birthday helps us make sure you get the right Instagram experience. Only you will be able to see your birthday.” Beyond just deciding who to let in, Instagram could use this info to make sure users under 18 aren’t messaging with adult strangers, that users under 21 aren’t seeing ads for alcohol brands, and that potentially explicit content isn’t shown to minors.

Instagram’s inability to do any of this clashes with it and Facebook’s big talk this year about its commitment to safety. Instagram has worked to improve its approach to bullying, drug sales, self-harm, and election interference, yet there’s been not a word about age gating.

Meanwhile, underage users promote themselves on pages for hashtags like #12YearOld where it’s easy to find users who declare they’re that age right in their profile bio. It took me about 5 minutes to find creepy “You’re cute” comments from older men on seemingly underage girls’ photos. Clearly Instagram hasn’t been trying very hard to stop them from playing with the app.

Illegal Growth

I brought up the same unsettling situations on Musically, now known as TikTok, to its CEO Alex Zhu on stage at TechCrunch Disrupt in 2016. I grilled Zhu about letting 10-year-olds flaunt their bodies on his app. He tried to claim parents run all of these kids’ accounts, and got frustrated as we dug deeper into Musically’s failures here.

Thankfully, TikTok was eventually fined $5.7 million this year for violating COPPA and forced to change its ways. As part of its response, TikTok started showing an age gate to both new and existing users, removed all videos of users under 13, and restricted those users to a special TikTok Kids experience where they can’t post videos, comment, or provide any COPPA-restricted personal info.

If even a Chinese app social media app that Facebook CEO has warned threatens free speech with censorship is doing a better job protecting kids than Instagram, something’s gotta give. Instagram could follow suit, building a special section of its apps just for kids where they’re quarantined from conversing with older users that might prey on them.

Perhaps Facebook and Instagram’s hands-off approach stems from the fact that CEO Mark Zuckerberg doesn’t think the ban on under-13-year-olds should exist. Back in 2011, he said “That will be a fight we take on at some point . . . My philosophy is that for education you need to start at a really, really young age.” He’s put that into practice with Messenger Kids which lets 6 to 12-year-olds chat with their friends if parents approve.

The Facebook family of apps’ ad-driven business model and earnings depend on constant user growth that could be inhibited by stringent age gating. It surely doesn’t want to admit to parents it’s let kids slide into Instagram, that advertisers were paying to reach children too young to buy anything, and to Wall Street that it might not have 2.8 billion legal users across its apps as it claims.

But given Facebook and Instagram’s privacy scandals, addictive qualities, and impact on democracy, it seems like proper age-gating should be a priority as well as the subject of more regulatory scrutiny and public concern. Society has woken up to the harms of social media, yet Instagram erects no guards to keep kids from experiencing those ills for themselves. Until it makes an honest effort to stop kids from joining, the rest of Instagram’s safety initiatives ring hollow.

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