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Is Europe closing in on an antitrust fix for surveillance technologists?

Posted by | Android, antitrust, competition law, data protection, data protection law, DCMS committee, digital media, EC, Europe, european commission, european union, Facebook, General Data Protection Regulation, Germany, Giovanni Buttarelli, Google, instagram, Margrethe Vestager, Messenger, photo sharing, privacy, Social, social media, social networks, surveillance capitalism, TC, terms of service, United Kingdom, United States | No Comments

The German Federal Cartel Office’s decision to order Facebook to change how it processes users’ personal data this week is a sign the antitrust tide could at last be turning against platform power.

One European Commission source we spoke to, who was commenting in a personal capacity, described it as “clearly pioneering” and “a big deal”, even without Facebook being fined a dime.

The FCO’s decision instead bans the social network from linking user data across different platforms it owns, unless it gains people’s consent (nor can it make use of its services contingent on such consent). Facebook is also prohibited from gathering and linking data on users from third party websites, such as via its tracking pixels and social plugins.

The order is not yet in force, and Facebook is appealing, but should it come into force the social network faces being de facto shrunk by having its platforms siloed at the data level.

To comply with the order Facebook would have to ask users to freely consent to being data-mined — which the company does not do at present.

Yes, Facebook could still manipulate the outcome it wants from users but doing so would open it to further challenge under EU data protection law, as its current approach to consent is already being challenged.

The EU’s updated privacy framework, GDPR, requires consent to be specific, informed and freely given. That standard supports challenges to Facebook’s (still fixed) entry ‘price’ to its social services. To play you still have to agree to hand over your personal data so it can sell your attention to advertisers. But legal experts contend that’s neither privacy by design nor default.

The only ‘alternative’ Facebook offers is to tell users they can delete their account. Not that doing so would stop the company from tracking you around the rest of the mainstream web anyway. Facebook’s tracking infrastructure is also embedded across the wider Internet so it profiles non-users too.

EU data protection regulators are still investigating a very large number of consent-related GDPR complaints.

But the German FCO, which said it liaised with privacy authorities during its investigation of Facebook’s data-gathering, has dubbed this type of behavior “exploitative abuse”, having also deemed the social service to hold a monopoly position in the German market.

So there are now two lines of legal attack — antitrust and privacy law — threatening Facebook (and indeed other adtech companies’) surveillance-based business model across Europe.

A year ago the German antitrust authority also announced a probe of the online advertising sector, responding to concerns about a lack of transparency in the market. Its work here is by no means done.

Data limits

The lack of a big flashy fine attached to the German FCO’s order against Facebook makes this week’s story less of a major headline than recent European Commission antitrust fines handed to Google — such as the record-breaking $5BN penalty issued last summer for anticompetitive behaviour linked to the Android mobile platform.

But the decision is arguably just as, if not more, significant, because of the structural remedies being ordered upon Facebook. These remedies have been likened to an internal break-up of the company — with enforced internal separation of its multiple platform products at the data level.

This of course runs counter to (ad) platform giants’ preferred trajectory, which has long been to tear modesty walls down; pool user data from multiple internal (and indeed external sources), in defiance of the notion of informed consent; and mine all that personal (and sensitive) stuff to build identity-linked profiles to train algorithms that predict (and, some contend, manipulate) individual behavior.

Because if you can predict what a person is going to do you can choose which advert to serve to increase the chance they’ll click. (Or as Mark Zuckerberg puts it: ‘Senator, we run ads.’)

This means that a regulatory intervention that interferes with an ad tech giant’s ability to pool and process personal data starts to look really interesting. Because a Facebook that can’t join data dots across its sprawling social empire — or indeed across the mainstream web — wouldn’t be such a massive giant in terms of data insights. And nor, therefore, surveillance oversight.

Each of its platforms would be forced to be a more discrete (and, well, discreet) kind of business.

Competing against data-siloed platforms with a common owner — instead of a single interlinked mega-surveillance-network — also starts to sound almost possible. It suggests a playing field that’s reset, if not entirely levelled.

(Whereas, in the case of Android, the European Commission did not order any specific remedies — allowing Google to come up with ‘fixes’ itself; and so to shape the most self-serving ‘fix’ it can think of.)

Meanwhile, just look at where Facebook is now aiming to get to: A technical unification of the backend of its different social products.

Such a merger would collapse even more walls and fully enmesh platforms that started life as entirely separate products before were folded into Facebook’s empire (also, let’s not forget, via surveillance-informed acquisitions).

Facebook’s plan to unify its products on a single backend platform looks very much like an attempt to throw up technical barriers to antitrust hammers. It’s at least harder to imagine breaking up a company if its multiple, separate products are merged onto one unified backend which functions to cross and combine data streams.

Set against Facebook’s sudden desire to technically unify its full-flush of dominant social networks (Facebook Messenger; Instagram; WhatsApp) is a rising drum-beat of calls for competition-based scrutiny of tech giants.

This has been building for years, as the market power — and even democracy-denting potential — of surveillance capitalism’s data giants has telescoped into view.

Calls to break up tech giants no longer carry a suggestive punch. Regulators are routinely asked whether it’s time. As the European Commission’s competition chief, Margrethe Vestager, was when she handed down Google’s latest massive antitrust fine last summer.

Her response then was that she wasn’t sure breaking Google up is the right answer — preferring to try remedies that might allow competitors to have a go, while also emphasizing the importance of legislating to ensure “transparency and fairness in the business to platform relationship”.

But it’s interesting that the idea of breaking up tech giants now plays so well as political theatre, suggesting that wildly successful consumer technology companies — which have long dined out on shiny convenience-based marketing claims, made ever so saccharine sweet via the lure of ‘free’ services — have lost a big chunk of their populist pull, dogged as they have been by so many scandals.

From terrorist content and hate speech, to election interference, child exploitation, bullying, abuse. There’s also the matter of how they arrange their tax affairs.

The public perception of tech giants has matured as the ‘costs’ of their ‘free’ services have scaled into view. The upstarts have also become the establishment. People see not a new generation of ‘cuddly capitalists’ but another bunch of multinationals; highly polished but remote money-making machines that take rather more than they give back to the societies they feed off.

Google’s trick of naming each Android iteration after a different sweet treat makes for an interesting parallel to the (also now shifting) public perceptions around sugar, following closer attention to health concerns. What does its sickly sweetness mask? And after the sugar tax, we now have politicians calling for a social media levy.

Just this week the deputy leader of the main opposition party in the UK called for setting up a standalone Internet regulatory with the power to break up tech monopolies.

Talking about breaking up well-oiled, wealth-concentration machines is being seen as a populist vote winner. And companies that political leaders used to flatter and seek out for PR opportunities find themselves treated as political punchbags; Called to attend awkward grilling by hard-grafting committees, or taken to vicious task verbally at the highest profile public podia. (Though some non-democratic heads of state are still keen to press tech giant flesh.)

In Europe, Facebook’s repeat snubs of the UK parliament’s requests last year for Zuckerberg to face policymakers’ questions certainly did not go unnoticed.

Zuckerberg’s empty chair at the DCMS committee has become both a symbol of the company’s failure to accept wider societal responsibility for its products, and an indication of market failure; the CEO so powerful he doesn’t feel answerable to anyone; neither his most vulnerable users nor their elected representatives. Hence UK politicians on both sides of the aisle making political capital by talking about cutting tech giants down to size.

The political fallout from the Cambridge Analytica scandal looks far from done.

Quite how a UK regulator could successfully swing a regulatory hammer to break up a global Internet giant such as Facebook which is headquartered in the U.S. is another matter. But policymakers have already crossed the rubicon of public opinion and are relishing talking up having a go.

That represents a sea-change vs the neoliberal consensus that allowed competition regulators to sit on their hands for more than a decade as technology upstarts quietly hoovered up people’s data and bagged rivals, and basically went about transforming themselves from highly scalable startups into market-distorting giants with Internet-scale data-nets to snag users and buy or block competing ideas.

The political spirit looks willing to go there, and now the mechanism for breaking platforms’ distorting hold on markets may also be shaping up.

The traditional antitrust remedy of breaking a company along its business lines still looks unwieldy when faced with the blistering pace of digital technology. The problem is delivering such a fix fast enough that the business hasn’t already reconfigured to route around the reset. 

Commission antitrust decisions on the tech beat have stepped up impressively in pace on Vestager’s watch. Yet it still feels like watching paper pushers wading through treacle to try and catch a sprinter. (And Europe hasn’t gone so far as trying to impose a platform break up.) 

But the German FCO decision against Facebook hints at an alternative way forward for regulating the dominance of digital monopolies: Structural remedies that focus on controlling access to data which can be relatively swiftly configured and applied.

Vestager, whose term as EC competition chief may be coming to its end this year (even if other Commission roles remain in potential and tantalizing contention), has championed this idea herself.

In an interview on BBC Radio 4’s Today program in December she poured cold water on the stock question about breaking tech giants up — saying instead the Commission could look at how larger firms got access to data and resources as a means of limiting their power. Which is exactly what the German FCO has done in its order to Facebook. 

At the same time, Europe’s updated data protection framework has gained the most attention for the size of the financial penalties that can be issued for major compliance breaches. But the regulation also gives data watchdogs the power to limit or ban processing. And that power could similarly be used to reshape a rights-eroding business model or snuff out such business entirely.

#GDPR allows imposing a permanent ban on data processing. This is the nuclear option. Much more severe than any fine you can imagine, in most cases. https://t.co/X772NvU51S

— Lukasz Olejnik (@lukOlejnik) January 28, 2019

The merging of privacy and antitrust concerns is really just a reflection of the complexity of the challenge regulators now face trying to rein in digital monopolies. But they’re tooling up to meet that challenge.

Speaking in an interview with TechCrunch last fall, Europe’s data protection supervisor, Giovanni Buttarelli, told us the bloc’s privacy regulators are moving towards more joint working with antitrust agencies to respond to platform power. “Europe would like to speak with one voice, not only within data protection but by approaching this issue of digital dividend, monopolies in a better way — not per sectors,” he said. “But first joint enforcement and better co-operation is key.”

The German FCO’s decision represents tangible evidence of the kind of regulatory co-operation that could — finally — crack down on tech giants.

Blogging in support of the decision this week, Buttarelli asserted: “It is not necessary for competition authorities to enforce other areas of law; rather they need simply to identity where the most powerful undertakings are setting a bad example and damaging the interests of consumers.  Data protection authorities are able to assist in this assessment.”

He also had a prediction of his own for surveillance technologists, warning: “This case is the tip of the iceberg — all companies in the digital information ecosystem that rely on tracking, profiling and targeting should be on notice.”

So perhaps, at long last, the regulators have figured out how to move fast and break things.

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Chat app Line gets serious about gaming with its latest acquisition

Posted by | Apps, Asia, computing, Facebook, facebook messenger, Fundings & Exits, Gaming, Indonesia, iPhone, iTunes, Japan, line, messaging apps, Messenger, Nintendo, payments, ride hailing, social media, Software, taiwan, Thailand, WhatsApp, world wide web | No Comments

Line, the company best-known for its popular Asian messaging app, is doubling down on games after it acquired a controlling stake in Korean studio NextFloor for an undisclosed amount.

NextFloor, which has produced titles like Dragon Flight and Destiny Child, will be merged with Line’s games division to form the Line Games subsidiary. Dragon Flight has racked up 14 million users since its 2012 launch — it clocked $1 million in daily revenue at peak. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond.

Line’s own games are focused on its messaging app, which gives them access to social features such as friend graphs, and they have helped the company become a revenue generation machine. Alongside income from its booming sticker business, in-app purchases within games made Line Japan’s highest-earning non-game app publisher last year, according to App Annie, and the fourth highest worldwide. For some insight into how prolific it has been over the years, Line is ranked as the sixth highest earning iPhone app of all time.

But, despite revenue success, Line has struggled to become a global messaging giant. The big guns WhatsApp and Facebook Messenger have in excess of one billion monthly users each, while Line has been stuck around the 200 million mark for some time. Most of its numbers are from just four countries: Japan, Taiwan, Thailand and Indonesia. While it has been able to tap those markets with additional services like ride-hailing and payments, it is certainly under pressure from those more internationally successful competitors.

With that in mind, doubling down on games makes sense and Line said it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles, from the second half of this year.

Line went public in 2016 via a dual U.S.-Japan IPO that raised over $1 billion.

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Messenger adds support for sharing HD video, 360-degree photos

Posted by | Apps, Facebook, Media, Messenger, Mobile, photos, Social, Video | No Comments

Perhaps aiming to snag some attention away from Snapchat’s big group video call update out this morning, Facebook also announced an update to its chat app Messenger, which will now allow users to share 360-degree videos and HD quality video (720p). In both cases, you’ll have to capture the photo or video outside the Messenger app, the company notes.

The update follows another that rolled out last fall, allowing users to share high-resolution photos through Messenger – something that Facebook said was the result of its significant investments in helping people “communicate visually.”

The idea that mobile messaging is often a camera-first experience isn’t unique to Facebook Messenger, of course – it’s the premise of the Snapchat experience and, these days, Instagram too.

Unfortunately for Facebook, news of improved media-sharing capabilities comes at a time when the company is under siege for its mishandling of user data, and, most recently, another reveal that it had been retaining videos that users believed to be deleted. The broader effect of this news cycle around Facebook’s approach to privacy, is an increased general mistrust of Facebook’s products as the place to share – including sharing through Messenger, which isn’t as distanced from the core product as Facebook-owned Instagram and Whatsapp are.

Facebook says if you want to share a 360-degree photo, you’ll need to first snap it with your camera or another 360-photo app before uploading it to Messenger where it will then be converted to an immersive experience that can be navigated through by the recipients via either tapping and dragging on mobile, or clicking and dragging on Messenger.com.

Similarly, HD videos will need to be first captured from the phone, or re-shared from the Facebook Newsfeed or other messages.

The rollout of the HD feature is limited to select markets for now, including Australia, Belgium, Canada, Denmark, Finland, France, Hong Kong, Japan, Netherlands, Norway, Romania, Singapore, South Korea, Sweden, Switzerland, Taiwan, the U.K. and the U.S. on iOS and Android.

360 photos, however, are available worldwide on iOS and Android.

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Google is acquiring GIF platform Tenor

Posted by | Apps, Facebook, giphy, Google, Messenger, Mobile, Social, Startups, Tenor | No Comments

Google will be acquiring Tenor, which powers a variety of GIF keyboards on phones and messengers like Facebook Messenger, the companies announced today.

Tenor will continue to operate as a separate brand within Google, the company said in a blog post. Tenor has increasingly positioned itself as a search company, using that as a metric for engagement and success as users tap into a massive database of GIFs. The company said it has more than 12 billion searches every month, and is one of the first major exits for a small but relatively hot space around tools that allow users to easily share GIFs. The company works with advertisers to create sponsored GIFs that slot into its searches, which are usually pretty compact and offer an opportunity to generate a lot of engagement.

GIFs have increasingly been pretty interesting because they offer an opportunity to compress a lot of information into something that’s easily shareable. Tenor CEO David McIntosh will often say that the company is about conveying emotion — and really, that isn’t something that often goes very well over text. If you’re watching the NCAA Men’s Basketball tournament, you’re probably better off searching for a GIF of your team rather than just blasting a text message to your group of friends.

“With their deep library of content, Tenor surfaces the right GIFs in the moment so you can find the one that matches your mood,” Google Images director of engineering Cathy Edwards said. “Tenor will help us do this more effectively in Google Images as well as other products that use GIFs, like Gboard. Tenor will continue to operate as a separate brand, and we’re looking forward to investing in their technology and relationships with content and API partners. So whether you’re using the Tenor keyboard or one of our other products, you can expect to see much more of this in your future:”

When you open Tenor, you’ll only find a small slice of GIFs that are available as the company is looking to compress the amount of time you actually spending digging around for a GIF you want to share. The theory is that if it’s easier to find and share one, you’ll do it again and again. This isn’t dissimilar from Google’s approach either, offering itself as a utility that’s a quick get-in, get-out experience that builds a level of stickiness that’s hard to unseat. Google is, of course, worth hundreds of billions of dollars off the back of a massive advertising business that basically prints money.

Tenor isn’t the only one in the space. Giphy, for example, also has a GIF keyboard and has a pretty large database of GIFs. Giphy says it has 300 million daily active users, though depending on who you talk to in the Valley that can mean a couple different things. Nevertheless, all of these companies have been able to attract venture financing. There’s also Gfycat, which positions itself as a tool for creators, that says it has 130 million monthly active users.

The terms of the deal weren’t disclosed. But by positioning itself as a search company that slots into a messaging ecosystem, Tenor seems like a natural piece of the puzzle for Google. It also gives the company a small wedge into the messenger space as it’ll have an opportunity to touch all the platforms that are connected to Tenor like even Facebook messenger, though that one tends to flip between GIF platforms indiscriminately.

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Facebook adds support for live streaming and video chats to Messenger games

Posted by | Apps, Facebook, Facebook Live, Gaming, Instant Games, instant gaming, live streaming, Messenger, Mobile, Social, TC, video chat | No Comments

 Last November, Facebook launched Instant Games, a new platform for gaming with friends inside the Messenger chat app. Today, the company is announcing a couple of notable new features for this gaming platform, including support for live streaming via Facebook Live and video chatting with fellow gamers. The idea with Instant Games is to boost people’s time spent in Messenger by giving… Read More

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Facebook introduces a Messenger plugin for business websites

Posted by | chat plugin, eCommerce, Facebook, Messenger, messenger chat, Mobile, Social, website plugin | No Comments

 Facebook Messenger is coming to businesses’ own websites. The social network announced today the launch of a new customer chat plugin into closed beta, which will allow customers to talk directly with businesses on their websites using Messenger, and continue those conversations across web, mobile and tablet devices. While there are already plenty of customer support and chat plugins… Read More

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You can now PayPal friends in Messenger and get help via chat

Posted by | Apps, Facebook, Finance, messaging, Messenger, Mobile, payments, PayPal, Social, TC | No Comments

 PayPal users in the U.S. will now be able to send and receive person-to-person payments over Facebook Messenger, the company announced this morning. The deeper integration with Messenger’s platform, which will also include PayPal’s first customer service bot for handling customer questions and requests for help, follows a series of tie-ups between the two companies. Last year,… Read More

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Facebook Messenger now supports group payments

Posted by | Apps, Facebook, Finance, group chat, Messenger, Mobile, payments, Social, TC | No Comments

 Facebook introduced person-to-person payments within Messenger in early 2015, but today the company announced the feature is expanding to support groups, as well. The payments feature essentially works the same in group chats as in private ones, but now allows users to pay either everyone in the group or individual members through a click of the payments icon. Read More

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As Messenger’s bots lose steam, Facebook pushes menus over chat

Posted by | Apps, bots, chatbots, Facebook, Messenger, Mobile, Social, TC | No Comments

Messenger Facebook’s Messenger bots may not be having the impact the social network desired. Just yesterday, online retailer Everlane, one of the launch partners for the bot platform, announced it was ditching Messenger for customer notifications and returning to email. Following this, Facebook today announced an upgraded Messenger Platform, which introduces a new way for users to interact with… Read More

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