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‘We’re waiting for answers’: Facebook, Brexit and 40 questions | Technology

‘We’re waiting for answers’: Facebook, Brexit and 40 questions | Technology


Mike Schroepfer, Facebook’s chief technology officer, was the second executive Facebook offered up to answer questions from parliament’s select committee for Digital, Culture, Media and Sport (DCMS).

He took his place in the hot seat in the wake of the first attendee, Simon Milner, Facebook’s (now ex-) head of policy for Europe, who answered a series of questions about Cambridge Analytica’s non-use of Facebook data that came back to haunt the company in the furore that followed the Observer and New York Times revelations from Christopher Wylie.

Schroepfer is Facebook’s nerd-in-chief. He was the tech guy sent to answer a series of questions from MPs about how his platform had facilitated what appeared to be a wholesale assault on Britain’s democracy, and though there was much he couldn’t answer, when he was asked about spending by Russian entities directed at British voters before the referendum, he spoke confidently: “We did look several times at the connections between the IRA [the Kremlin-linked Internet Research Agency] … and the EU referendum and we found $1 of spend. We found almost nothing.”

But new evidence released by the United States Congress suggests adverts were targeted at UK Facebook users, and paid for in roubles, in the months preceding the short 10-week period “regulated” by the Electoral Commission but when the long campaigns were already under way.

This is the latest episode in a series of miscommunications between the company and British legislators, which has come to a head in the week the Electoral Commission finally published the findings of its investigation into the Leave.EU campaign.

Damian Collins, the chair of the DCMS committee, said: “We asked them to look for evidence of Russian influence and they came back and told us something we now know appears misleading. And we’re still waiting for answers to 40 questions that Mike Schroepfer was unable to answer, including if they have any record of any dark ads.

“It could be that these adverts are just the tip of the iceberg. It’s just so hard getting any sort of information out of them, and then not knowing if that information is complete.”



Leave.EU supporters celebrate the Leave vote in Sunderland after polling stations closed in the Brexit referendum. Photograph: Toby Melville/Reuters

Preliminary research undertaken by Twitter user Brexitshambles suggests anti-immigrant adverts were targeted at Facebook users in the UK and the US.

One – headlined “You’re not the only one to despise immigration”, which cost 4,884 roubles (£58) and received 4,055 views – was placed in January 2016. Another, which accused immigrants of stealing jobs, cost 5,514 roubles and received 14,396 impressions. Organic reach can mean such adverts are seen by a wider audience.

Facebook says that it only looked for adverts shown during the officially regulated campaign period. A spokesperson said: “The release of the set of IRA adverts confirms the position we shared with the Electoral Commission and DCMS committee. We did not find evidence of any significant, coordinated activity by the IRA operatives directed towards the Brexit referendum.

“This is supported by the release of this data set which shows a significant amount of activity by the IRA with only a handful of their ads listing the UK as a possible audience.”

Collins said that the committee was becoming increasingly frustrated by Facebook’s reluctance to answer questions and by founder Mark Zuckerberg’s ongoing refusal to come to the UK to testify.

Milner told the committee in February that Cambridge Analytica had no Facebook data and could not have got data from Facebook.

The news reinforces MPs’ frustrations with a system that last week many of them were describing as “broken”. On Friday, 15 months after the first Observer article that triggered the Electoral Commission’s investigation into Leave.EU was published, it found the campaign – funded by Arron Banks and endorsed by Nigel Farage – guilty of multiple breaches of electoral law and referred the “responsible person” – its chief executive, Liz Bilney – to the police.

Banks described the commission’s report as a “politically motivated attack on Brexit”.

Leading academics and MPs called the delay in referring the matter to the police “catastrophic”, with others saying British democracy had failed. Liam Byrne, Labour’s shadow digital minister, described the current situation as “akin to the situation with rotten boroughs” in the 19th century. “It’s at that level. What we’re seeing is a wholesale failure of the entire system. We have 20th-century bodies fighting a 21st-century challenge to our democracy. It’s totally lamentable.”

Stephen Kinnock, Labour MP for Aberavon, said it was unacceptable that the Electoral Commission had still not referred the evidence about Vote Leave from Christopher Wylie and Shahmir Sanni – published in the Observer and submitted to the Electoral Commission – to the police. He said: “What they seem to have done, and are continuing to do, is to kick this into the long grass. There seems to be political pressure to kick this down the road until Britain has exited the EU.”

He accused the commission of ignoring what he considered key evidence, including about Cambridge Analytica. The commission had found Leave.EU guilty of not declaring work done by its referendum strategist, Goddard Gunster, but said it had found no evidence of work done by Cambridge Analytica.

“The whole thing stinks,” Kinnock said. “I wrote to the commission with evidence that the value of work carried out by Cambridge Analytica was around £800,000. The glib way it dismissed the multiple pieces of evidence about the company was extraordinary. I just think it is absolutely not fit for purpose.”

Gavin Millar QC, a leading expert in electoral law at Matrix Chambers, said: “Our entire democratic system is vulnerable and wide open to attack. If we allow this kind of money into campaigning on national basis – and the referendum was the paradigm for this – you have to have an organisation with teeth to police it.”

Damian Tambini, director of research in the department of media and communications at the London School of Economics, described the whole system as broken and said there was not a single investigatory body that seemed capable of uncovering the truth. “The DCMS Select Committee has found itself in this extraordinary position of, in effect, leading this investigation because it at least has the power to compel witnesses and evidence – something the Electoral Commission can’t do. It’s the classic British solution of muddling through.

“The big picture here is it’s possible for an individual or group with lots of money and some expertise to change the course of history and buy an election outcome. And with our regulatory system, we’ll never know if it’s happened.”

This article was amended on 13 May 2018 to clarify that a remark from Damian Tambini referred to the DCMS Select Committee.





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MPs threaten Mark Zuckerberg with summons over Facebook data | News

MPs threaten Mark Zuckerberg with summons over Facebook data | News


MPs have threatened to issue Mark Zuckerberg with a formal summons to appear in front of parliament when he next enters the UK, unless he voluntarily agrees to answer questions about the activities of his social network and the Cambridge Analytica scandal.

Damian Collins, the chair of the parliamentary committee that is investigating online disinformation, said he was unhappy with the information the company had provided and now wanted to hear evidence from the Facebook chief executive before parliament went into recess on 24 May.

Saturday 17 March

The Observer publishes online its first story on the Facebook and Cambridge Analytica scandal, written by Carole Cadwalladr and Emma Graham-Harrison.

Former Cambridge Analytica employee Christopher Wylie reveals how the firm used personal information taken in early 2014 to build a system that could profile individual US voters.

The data was collected through an app, built by academic Aleksandr Kogan, separately from his work at Cambridge University, through his company Global Science Research (GSR).

Sunday 18 March

As the Observer publishes its full interview with Wylie in the print edition, the fallout begins. US congressional investigators call for Cambridge Analytica boss Alexander Nix to testify again before their committee.

Monday 19 March

Channel 4 News airs the findings of an undercover investigation where Cambridge Analytica executives ​boast of using honey traps, fake news campaigns and operations with ex-spies to swing election campaigns.

Tuesday 20 March

​A former Facebook employee claims​ hundreds of millions of Facebook users may have had their private information harvested by companies in similar methods.

Wednesday 21 March

UK MPs summon Mark Zuckerberg to appear before a select committee investigating fake news, and accuse Facebook of misleading them at a previous hearing. 

Thursday 22 March

It emerges Facebook had previously provided Kogan with an anonymised, aggregate dataset of 57bn Facebook friendships. Zuckerberg breaks his silence to call the misuse of data a ‘breach of trust’.

Friday 23 March

Brittany Kaiser, formerly Cambridge Analytica’s business development director, reveals the blueprint for how CA claimed to have won the White House for Donald Trump by using Google, Snapchat, Twitter, Facebook and YouTube.


Photograph: Antonio Olmos

“It is worth noting that, while Mr Zuckerberg does not normally come under the jurisdiction of the UK parliament, he will do so the next time he enters the country,” Collins wrote in a public letter to Facebook. “We hope that he will respond positively to our request, but, if not, the committee will resolve to issue a formal summons for him to appear when he is next in the UK.”

Collins referred to an unconfirmed report by Politico that Zuckerberg planned to appear in front of the European parliament this month, suggesting it would be simple for the Facebook chief to extend his trip to attend a hearing in the UK.

The committee has repeatedly invited Zuckerberg to give evidence but Facebook has sent more junior executives to answer questions from MPs.

Facebook declined to comment on the possibility of a formal summons. In theory, Zuckerberg could be found in contempt of parliament if he refuses one.

When Rupert Murdoch and his son James resisted appearing in front of a select committee in 2011 it was speculated that potential punishments could include “fines and imprisonment”. In reality it is likely that, at worst, the punishment for ignoring such a summons would include an arcane process resulting in little more than a formal warning.

Collins said last week’s five-hour evidence session by Facebook’s chief technology officer, Mike Schroepfer, was unsatisfactory and his answers “lacked many of the important details” needed.

Collins’ committee formally issued a list of 39 supplementary questions they wanted answered following Schroepfer’s session, in which Facebook was labelled a “morality-free zone”.

Zuckerberg did make time to appear in front of the US Congress, where politicians were allocated five minutes each to ask questions. British select committee hearings allow politicians more time to ask follow-up questions, potentially making it a more testing experience.



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Can Instagram keep its nose clean? | Technology

Can Instagram keep its nose clean? | Technology


It has been a rough few weeks for Facebook since the Observer reported the Cambridge Analytica data breach. The scandal revealed how the political consulting firm might have raked up the personal information of at least 87 million Facebook users in order to influence them with tailored political ads, sent the social network’s stocks into a tailspin, triggered the #DeleteFacebook movement – and regaled the planet with the cringefest that was CEO Mark Zuckerberg’s testimony before the US Senate. But if Facebook’s reputation has seen better days, one of the company’s most valuable assets has come out of the kerfuffle practically unscathed.

Instagram, the photo-sharing platform Facebook acquired in 2012 for $715m, has not yet come up in the debate over Facebook’s cavalier attitude to user data protection, despite being of a piece with the longer-running social network (and being headquartered just a few blocks from Facebook’s Menlo Park campus in California). Prominent members of the #DeleteFacebook campaign, such as SpaceX’s Elon Musk, singer Cher, and Playboy magazine, are still pretty much present and active on Instagram. The app’s apparent immunity to whatever befalls its owner, and the possibility that this might not last, even led a Reuters analyst to recommend that Facebook spin off Instagram as a separate company, to shield it from reputational contagion.

Instagram’s cast-iron popularity confirms its emerging status as Facebook’s crown jewel. The app is gaining users at a breakneck pace: it only took it five months to leap from 700 million users in April 2017 to 800 million in September. It is especially popular with younger people: in March 2018, a survey by the Pew Research Center found that 71% of Americans aged 18 to 24 were on Instagram, and that more than half of them visited it daily. And it trounces other platforms at the engagement game: 2017 research by business intelligence firm L2 revealed that Instagram accounted for 92% of interactions taking place on social media, if only Facebook, Twitter and Instagram itself were considered; that dropped to a still whopping 42% if YouTube was also taken into account. According to consumer data firm Statista, this year Instagram is expected to make up almost 28% of Facebook’s net mobile advertising revenue.

“If you measure success through the size of a community and then multiply it for engagement, Instagram gets 10 times the engagement that Facebook gets,” says L2 founder and New York University professor Scott Galloway. “In many ways, it’s currently the most successful platform in the world.”

Part of that success boils down to Instagram’s intrinsic qualities. Its visual-first model may be more appealing than Twitter’s or Facebook’s text-heavy makeup. In the absence of a share function, users only post their own pictures and videos, so there’s no angsty clutter of links and reposts that took the joy out of other social networks.

“The genius of Facebook was the same [as Instagram’s] core habit: seeing other people’s photos,” says Nir Eyal, an angel investor, and author of Hooked: How to Build Habit-Forming Products. “On Facebook, that core habit was polluted with all the other junk in our feed. That’s causing a lot of the move to Instagram: people don’t want all the news, debate and politics.”

On the other hand, it’s hard not to feel that Instagram lucked out, effectively airbrushing its public image amid Facebook’s whirlwind of scandals. It is worth noting, too, that many people do not know that Instagram belongs to Facebook: according to a recent DuckDuckGo survey, 56.9% of Americans are unaware of the connection. Not that Facebook or Instagram were ever keen on emphasising that connection in their marketing material – a stance that, in retrospect, has paid off.

Yet Instagram shares many of the problems and flaws that have catapulted Facebook into the spotlight. The blight of fake news and foreign interference has marred Instagram at least as much as it has Facebook: according to Facebook’s own testimony before the US Congress, last year, 170 Instagram accounts were found to have spread propaganda from Russia’s Internet Research Agency, compared to only 120 Facebook pages.

“Instagram is as large a component of election propaganda as Facebook, if not larger,” says Jonathan Albright, a data journalist and research director at Columbia University’s Tow Center for Digital Journalism.

Although Instagram has not cropped up in the Cambridge Analytica affair, the ads appearing on the platform can be tailored for custom audiences directly from Facebook’s advertising dashboard – by leveraging Facebook data.

In the wake of the scandal, Facebook has hastened to make sure that Instagram’s data privacy practices were improved. In early April, Instagram suddenly shut down access to its application programming interface (API), disrupting several third-party apps relying on it to glean user analytics. Days later, Instagram announced it was creating a tool that would enable users to download all the data they have shared on the platform – a move that brought it in line with Facebook (which made data portability possible in 2010) and with the EU’s soon-to-be-implemented General Data Protection Regulation.

In time, Instagram is also likely to come under increased scrutiny for other long-running but unsolved issues, such as its impact on young users’ mental health, and the rise of Instagram influencers – people who make a living by featuring brands and products in their pictures for a fee. The field is unregulated, lacks transparency and is prone to abuse and fraud. But Instagram could be in the process of sorting the issue out, and possibly even making some money along the way.

Instagram’s artsy vibe and relative independence protected it from the flak lobbed at its parent company. But as the photo-sharing service coasts towards a billion users, its shortcomings cannot just be covered with a dreamy filter: the way Instagram handles these challenges will come to define it.



Get the picture (l-r): Elon Musk posts on Instagram despite calling to #DeleteFacebook; Kim Kardashian endorses a fitness shake; a paid partnership post; a repost of rightwing propaganda. Photograph: Instagram

Potential pitfalls for Instagram

Russian roulette
According to Tow Center’s Jonathan Albright, Instagram was one of Russia’s platforms of choice for sharing propaganda memes and videos ahead of the US presidential election in 2016. And while Facebook pegged the number of American Instagram users reached by propaganda at around 20 million, Albright thinks that number could be much higher, as trolls resorted to third-party apps such as Regrann to repost content multiple times. Posts on Instagram might also have been more engaging than those shared on Facebook, possibly because of Instagram’s sleeker interface.

“Instagram had better engagement for these posts versus Facebook,” Albright says. “Facebook gets messy, people post their pictures, embeds, previews, and the comments on the post get really disorganised. Instagram had better engagement for outrage, for people really getting angry and commenting more on-topic.”

While Instagram has removed the 170 profiles thought to be linked to Russia, Albright says that it has not actually got rid of all the propaganda disseminated on the platform.

“The only things that were taken down were the original accounts, so if there’s any kind of screenshot or repost, it’s still around,” he says. “[Instagram] didn’t go back and filter or search anything.” He says that, as of last month, some of the Russian-made memes could still be found lurking on Instagram.

Celebs for sale
The airbrushed world of Instagram has helped bring about a new profession – that of online influencers. Influencers are social media users who, having commanded a high follower count, partner with brands to feature products in their posts, in exchange for freebies or money. While many niche “micro-influencers” ask brands for relatively small amounts, Instagram-famous personalities can make thousands of pounds for every picture, with celebrities such as Kim Kardashian charging up to $500,000 a post.

Influencers’ activity on Instagram increased by 198% between 2016 and 2017, according to online marketing research firm Klear. The irresistible rise of this new category has created a host of new problems. Brands started fretting about “fake influencers”, followed by spurious armies of bots. Advertising authorities in various countries requested that influencers acknowledge that they are paid for promoting products, by adding the hashtag #ad to their posts. Last year, Instagram launched a branded content tool, which allows influencers to tag their partner brands more visibly in their posts. The feature was officially rolled out to enhance transparency, and to provide brands with insights about the performance of influencers’ posts online. But according to Callum McCahon, strategy director at social media firm Born Social, it could end up changing the way the influencer industry works. “Brands could be asked to pay for promoting their influencers’ posts and increasing their reach,” he said. “Instagram could then make money from brands boosting their influencers’ pictures. That’s not officially confirmed as of today, but that’s what Facebook did in the past.”

a teenage girl cries on the sofa reading a text message



Negative impact: academics and others have suggested that Instagram can make young people feel bad about their appearance and lifestyle. Photograph: Aleksandr Davydov/Alamy Stock Photo

Mental health
In May 2017, the Royal Society for Public Health (RSPH) published a report on social media’s impact on the mental health of young people. Instagram was labelled as the platform with the worst impact on its young users’ mental wellbeing. Problems ranged from anxiety- and depression-inducing imagery, to bullying, to body image issues. A more recent study from the University of Notre Dame in Fremantle, Western Australia revealed that young women exposed to the luridly filtered existences of Instagrammers were likely to feel bad about both their appearance and their general lifestyle and career.

Over the past few months, Instagram seems to have taken notice, introducing new tools, such as comment filters and pop-up alerts for problematic hashtags, that could help alleviate some of the mental health problems highlighted by researchers.

Then, in April 2018, during a Bloomberg event, the company announced the launch of a dedicated “wellbeing team” with the goal of making Instagram a “safer place, a place where people feel good”. The group’s strategy is still unclear, but at least it seems that Instagram has acknowledged that with greater power comes greater responsibility.

“It is surprising that Instagram has only recently launched the wellbeing team,” said Dr Becky Inkster, an honorary research fellow at the University of Cambridge, who contributed to the RSPH study. “They need to be far more proactive with how they handle potential negative effect and harm.” Inkster is optimistic, however, about Instagram leading the way to better understanding of how images affect our mental welfare. “Instagram can be a big player, and help in this area,” she says.





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UK has six months to rewrite snooper’s charter, high court rules | Technology

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The British government must rewrite its mass data surveillance legislation because it is incompatible with European law, the high court has ruled.

Judges have given ministers and officials six months to redraft the 2016 Investigatory Powers Act, labelled the snooper’s charter by critics, following a crowdfunded challenge by the human rights group Liberty.

Ministers had already accepted that some aspects of the act do not comply with EU law and needed to be revised. They wanted until April next year to introduce new rules.

On Friday, however, Lord Justice Singh and Lord Justice Holgate said legislation must be drawn up by the start of November.

Lawyers for Liberty argued in February that the act violates the public’s right to privacy by allowing the storage of and access to internet data.

The government accepted the act was inconsistent with EU law because access to retained data was not limited to the purpose of combating “serious crime” and was not subject to prior review by a court or other independent body.

The case was the first stage of Liberty’s legal challenge against the act and was funded by supporters who raised more than £50,000.

The Home Office announced a series of new safeguards last year in anticipation of the ruling. They included removing the power of self-authorisation for senior police officers, and requiring approval for requests for confidential communications data to be granted by the investigatory powers commissioner. Liberty said the safeguards did not go far enough.

The group has launched another fundraising effort for the next stage of its case, which includes challenging rules on bulk interception of digital communications.

It argues that the powers to intercept communications in bulk and create files known as personal datasets undermine free speech, privacy and patient confidentiality, legal privilege and journalists’ sources.

Speaking after the ruling, Liberty’s director, Martha Spurrier, said: “Police and security agencies need tools to tackle serious crime in the digital age, but creating the most intrusive surveillance regime of any democracy in the world is unlawful, unnecessary and ineffective.”

The latest ruling follows an appeal court decision in January against previous surveillance rules in the 2014 Data Retention and Investigatory Powers Act, which expired at the end of 2016.

Three senior judges concluded that Dripa was inconsistent with EU law following a challenge by the Labour deputy leader, Tom Watson, and campaigners, who were supported by Liberty.



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From Seattle to Luxembourg: how tax schemes shaped Amazon | Technology

From Seattle to Luxembourg: how tax schemes shaped Amazon | Technology


When Jeff Bezos was looking for a home for his fledgling online bookseller, amazon.com, in 1994, his first choice is said to have been a Native American reservation. The location would have presented generous tax breaks if the state of California had not intervened and halted the plan.

Next stop was Seattle, selected because of Washington state’s small population. At the time only those retailers with a physical presence in a state paid sales taxes, so a home state with a small population meant the lowest possible sales tax burden. Sales made into other more populous states would not be taxed.

It was a strategic decision that would characterise Amazon’s attitude towards paying tax over the next two decades. Its critics allege that it owes its position as the world’s largest online retailer in part to its use of contrived and artificial tax arrangements that – while legal – endow it with competitive advantages no bricks-and-mortar retailer could ever hope to enjoy.

The company deployed the strategy in Luxembourg, the tiny European country that became, in the words of the Tax Justice Network, “the Death Star of financial secrecy” in a national bid to attract capital through tax competition.

The architect of that transformation, Jean-Claude Juncker, later became the president of the European commission, and has been dogged by questions about his suitability for the post in an atmosphere of increasing anger about tax avoidance ever since.

Amazon first arrived in Luxembourg in 2003, and within a few months secured a confidential agreement with the country’s tax authorities. Bob Comfort, Amazon’s head of tax, would later tell the Luxembourgish newspaper d’Lëtzebuerger Land that Juncker had personally offered to help Amazon. “His message was simply: ‘If you encounter problems which you don’t seem to be able to resolve, please come back and tell me. I’ll try to help.’” Comfort was later appointed Luxembourg’s “honorary consul to Seattle”, the location of Amazon’s US headquarters.

Fast-forward a decade, and Amazon would find itself in the crosshairs of Europe’s competition commissioner, Margrethe Vestager, best known for her ruling that Apple enjoyed €13bn of illegal state aid from Ireland in the form of preferential tax treatment. Her investigation into Amazon would focus on the nature of its secret deal with Luxembourg. But the details of that deal would be revealed not as a result of her inquiry, but by a parallel investigation by the Internal Revenue Service in the US.

The tax strategy, internally codenamed Project Goldcrest after the national bird of Luxembourg, was fundamental to Amazon’s plan to put the duchy at the heart of the European business of its global empire. Though highly complicated, at its core the scheme involved the following interplay between entities in Luxembourg and the US:

1. Amazon Europe Holding Technologies SCS (AEHT) would own the legal right to use Amazon’s intellectual property, or IP, outside the United States. Because it was a specific type of legal entity, called a “non-resident partnership”, any money it received from other Amazon entities in exchange for the right to use that IP would be tax-free.

2. Amazon EU Sarl, which operates Amazon’s European businesses, would pay AEHT hundreds of millions of euros in “royalty fees” for that IP each year. The cost of the royalties would be offset against its own tax bill.

3. AEHT would pay Amazon’s US business its own royalty fees for the right to license out that IP in Europe.

While EU regulators argued that the royalties between the two Luxembourg companies were too high, US regulators argued the royalties paid back to Amazon’s American headquarters were too low. The net effect of the baroque Project Goldcrest was to reduce Amazon’s taxes everywhere.

Last year the EU ordered Amazon to repay €250m in “illegal tax advantages” following its investigation, and last month the European commission proposed a new 3% “digital tax” on the revenues (rather than profits) of large technology companies – to prevent them avoiding taxes by shifting their profits around the globe.

In the UK, campaigners have long held suspicions that HM Revenue and Customs selects which taxpayers to pursue for alleged underpayment according to political expediency. HMRC has always denied these claims, and says it treats all taxpayers equally according to the law. But those allegations were made substantially more credible two months ago, when a VAT campaigner released a covert recording of his off-the-record conversation with an HMRC official in the pub. The subject of their discussion: Amazon. “I’ve heard from the Treasury; the Treasury didn’t want us to be too hard on Amazon,” the official said, before adding “but I think that was ‘yet’”. HMRC did not respond to the specifics of the recording, but reiterated that it “has not been told to be soft on multinationals and no taxpayer gets preferential treatment”.



A student at the University of Alabama pushes a large Amazon Dash button, which was part of Birmingham’s campaign to lure Amazon’s second headquarters. Photograph: Brynn Anderson/AP

More recently Donald Trump has repeatedly accused Amazon of underpayment of taxes – although the US president has previously bragged that paying little to no tax made him “smart”, and his grudge against the company is likely to be partly motivated by his hatred of the Bezos-owned Washington Post. But one focus of Trump’s attacks, an arrangement between Amazon and the United States Postal Service, which the president alleges is unfairly generous, is emblematic of the company’s strategy of haggling with public authorities.

Amazon is presently inviting US cities to outbid each other in a contest to host its “second headquarters”, waving the promise of 50,000 jobs and $5bn of investment in front of the winning applicant. Maryland offered $5bn of tax incentives – dollar for dollar the same as the pledged investment – for the company to opt for Montgomery County, while California offered between $300m and $1bn of breaks. New Jersey even promised $7bn of tax incentives – $2bn more than Amazon’s maximum investment. Whichever city wins, it seems likely that tax will influence its decision-making: the firm’s published criteria for bidders specifically cites “a stable and business-friendly environment and tax structure” as a high priority.



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Safeguards for social media ‘inadequate’, says Jeremy Hunt | Politics

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The health secretary Jeremy Hunt launched a blistering attack on Sunday on social media companies for “turning a blind eye” to emotional problems and mental health damage suffered by children who have uncontrolled access to their online platforms.

In an angrily worded letter sent to executives at Apple, Microsoft, Facebook, Snapchat, Twitter and Google, Hunt says their failure to come forward with safeguards to control access is both “morally wrong” and “unfair on parents”.

Hunt says their inadequate responses have left him with no option but to consider legislation on internet safety. He has also asked the chief medical officer, Dame Sally Davies, to report on the impact of technology on young people’s mental health, and to recommend healthy limits for screen time.

In the letter, Hunt tells the companies that their work on devising ways to verify the age of children accessing social media platforms, on screen-time limits, and on measures to end cyberbullying has fallen short.

“In particular, progress on age verification is not good enough … I am concerned that your companies seem content with a situation where thousands of users breach your own terms and conditions on the minimum user age.

“I fear that you are collectively turning a blind eye to a whole generation of children being exposed to the harmful emotional side-effects of social media prematurely; this is both morally wrong and deeply unfair on parents, who are faced with the invidious choice of allowing children to use platforms they are too young to access, or excluding them from social interaction that often the majority of their peers are engaging in. It is unacceptable and irresponsible for you to put parents in this position.”

With the NHS facing a mounting crisis over a lack of mental health services for young people, the Guardian reported last year that an increasing number of young women were suffering mental health problems linked to conflicts with friends, fears about their body image and pressures created by social media.

Rates of stress, anxiety and depression were rising particularly sharply among teenage girls. NHS data showed that the number of times a girl aged 17 or under has been admitted to hospital in England because of self-harm had jumped from 10,500 to more than 17,500 a year over the previous decade – a rise of 68%. The rise among boys was much lower at 26%.

Hunt recognises in the letter that some progress has been made in developing new products to help parents limit what their children can access, but says it is nowhere near enough to convince him that the voluntary process for addressing the issues is working.

He adds that the pioneering services offered by the companies are not matched by an accompanying willingness to protect young people from the adverse effects: “Your industry boasts some of the brightest minds and biggest budgets globally. While these issues may be difficult, I do not believe that solutions are outside your reach: I do question whether [there] is sufficient will to reach them.”

The health secretary has been pushing for action from social media companies since late 2016, when he raised concerns about a growing online culture of intimidation and sexual imagery.

“There is a lot of evidence that the technology industry, if they put their mind to it, can do really smart things,” he said at the time. “For example, I ask myself the simple question as to why you can’t prevent the texting of sexually explicit images by people under the age of 18, if that’s a lock that parents choose to put on a mobile phone contract.” He added: “There is technology that can identify sexually explicit pictures and prevent [them] being transmitted.”

He also said at the time that technology should be used to tackle cyberbullying automatically, using “word-pattern recognition”.

There were many areas “where social media companies could put options in their software that could reduce the risks associated with social media”, he added.



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Artificial intelligence, robots and a human touch | Letters | Technology

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Elon Musk’s comment that humans are underrated (Humans replace robots at flagging Tesla plant, 17 April) doesn’t come as much of a surprise, even though his company is at the forefront of the technological revolution. Across industries, CEOs are wrestling with the balance between humans and increasingly cost-effective and advanced robots and artificial intelligence. However, as Mr Musk has discovered, the complexity of getting a machine to cover every possibility results in a large web of interconnected elements that can overcomplicate the underlying problem. This is why so many organisations fail when they try to automate everything they do. Three key mistakes I see time and again in these situations are missing the data basics, applying the wrong strategy, and losing the human touch.

There are some clear cases where automation works well: low value, high repetition tasks or even complex ones where additional data will give a better outcome, for example, using medical-grade scanners on mechanical components to identify faults not visible to the human eye. But humans are better at reacting to unlikely, extreme, or unpredictable edge cases, for example being aware that a music festival has relocated and extra cider needs to go to stores near the new venue rather than the previous location.

Regardless of industry, it’s only by maintaining a human touch – thinking and seeing the bigger picture – that automation and AI can add the most value to businesses.
Deborah O’Neill
Partner, Oliver Wyman

The House of Lords report (Cambridge Analytica scandal ‘highlights need for AI regulation’, theguardian.com, 16 March) outlining the UK’s potential to be a global leader in artificial intelligence – and its calls for governmental support of businesses in the field and education to equip people to work alongside AI in the jobs of the future – should be welcomed for two reasons. First, it recognises the potential of UK-based AI companies to benefit the economy. Supporting these fast-growing companies to ensure that they continue to scale – and eventually exit – here should be a strategic priority, particularly at a time when a new generation of fast-growth providers, such as Prowler.io and Benevolent AI in life sciences, and ThoughtRiver in legal tech, is emerging to build on an impressive track record of AI innovation in the UK, from Alan Turing to DeepMind.

Second, it acknowledges that AI can contribute significantly to businesses’ competitive advantage – a view that few too UK businesses seem to appreciate at a time when media coverage of the topic is dominated by scaremongering about job losses, security threats, ethics, and bias. It’s refreshing to see a more positive narrative about AI and the workplace starting to emerge. What we now need to see is more of from the business world is openness to the opportunities that AI creates in terms of continuing, and expanding on, the positivity of this report, and leadership in sharing their successes in this area that others can learn from.
Matt Meyer
CEO, Taylor Vinters

The announcement from the House of Lords that Britain must “lead the way” on the regulation of artificial intelligence (AI) highlights the current climate of concern around the ways that AI could impact society, in particular, fears of weaponised AI used by militaries and other unethical usage. But there are many other applications where “ethical” AI is crucial – in making accurate medical diagnoses, for example. 

There is no doubt AI will transform how society operates, and that there is a need for improper use to be safeguarded against. However, creating ethical AI algorithms will take more than just an announcement. It will require far greater collaboration between governments, and industry and technology experts. By working with those that understand AI, regulators can put in place standards that protect us while ensuring AI can augment humans safely, so that we can still reap its full potential.
Dr Nick Lynch
The Pistoia Alliance

Join the debate – email [email protected]

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Vince Cable calls for break-up of Google, Facebook and Amazon | Politics

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Vince Cable has compared Google, Amazon and Facebook to the US oil monopolies that exploited their market power more than a century ago – and called for them to be broken up.

In a speech in London, the Liberal Democrat leader said a series of recent scandals, including revelations about Facebook and Cambridge Analytica, meant the “tech titans” had “progressed from heroes to villains very quickly”.

“Just as Standard Oil once cornered 85% of the refined oil market, today Google drives 89% of internet searches, 95% of young adults on the internet use a Facebook product, Amazon accounts for 75% of ebook sales, while Google and Apple combined provide 99% of mobile operating systems,” he said.

Cable, a former business secretary who worked as an economist before entering politics, said the power the giant firms exercised was not like that of traditional monopolies, which exploited their control of scarce resources such as raw materials to overcharge customers.

“Whatever these companies do, they are not price gouging – since their headline price is always zero,” he said. “It is the forces underlying this apparently free bounty that politicians must address.”

Cable raised four concerns: the use of platforms such as YouTube “as a conduit for content which society regards as unacceptable”; the systematic spread of fake news; the firms’ sheer size, making them “a barrier rather than a boon to entrepreneurship”, and the inability of tax authorities to force them to pay their fair share.

“The new internet giants operate in a largely borderless world where their main source of profit is intangible intellectual property rather than measurable ‘things’. This is difficult to track and quantify and has turned national tax authorities into largely powerless bystanders,” he said.

He called for mergers to be more closely scrutinised and for authorities to engage in “trust-busting” – breaking up oversized companies that can exploit their dominance to harm consumers – adding that the European Union was better-placed to do this than national governments working alone.

“There is a case for splitting Amazon into three separate businesses – one offering cloud computing, one acting as a general retailer and one offering a third-party marketplace. Other examples would be Facebook being forced to divest itself of Instagram and WhatsApp as a condition for operating in the EU, creating two new social media networks. Divesting Google of YouTube would be another,” he said.

Cable also said it was time to consider whether the public should be paid for handing over their data.

“The new oil is data. Data is the raw material which drives these firms and it is control of data which gives them an advantage over competitors,” he said.

“By putting data in people’s hands and empowering them to choose who to sell it to, personal data would no longer be monopolised by the tech giants, and innovative insurgents could buy the data they needed instead of letting themselves be bought up to access the giants’ data pools.”

Politicians have been scrambling to address the challenge of regulating the sprawling tech firms, after a series of recent scandals.

Facebook founder Mark Zuckerberg donned a suit and tie to face hours of questioning by US politicians. And in Britain, the culture secretary, Matt Hancock, hauled in Facebook executives and warned them he would not allow them to “shirk their responsibilities to our citizens”.


Did senators questioning Facebook’s Mark Zuckerberg understand the internet? – video



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US and UK blame Russia for ‘malicious’ cyber-offensive | Technology

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The cyberwar between the west and Russia has escalated after the UK and the US issued a joint alert accusing Moscow of mounting a “malicious” internet offensive that appeared to be aimed at espionage, stealing intellectual property and laying the foundation for an attack on infrastructure.

Senior security officials in the US and UK held a rare joint conference call to directly blame the Kremlin for targeting government institutions, private sector organisations and infrastructure, and internet providers supporting these sectors.

Rob Joyce, the White House cybersecurity coordinator, set out a range of actions the US could take such as fresh sanctions and indictments as well as retaliating with its own cyber-offensive capabilities. “We are pushing back and we are pushing back hard,” he said.

Joyce stressed the offensive could not be linked to Friday’s raid on Syria. It was not retaliation for the US, UK and French attack as the US and UK had been investigating the cyber-offensive for months. Nor, he said, should the decision to make public the cyber-attack be seen as a response to events in Syria.

Joyce was joined in the call by representatives from the FBI, the US Department of Homeland Security and the UK’s National Cyber Security Centre (NCSC), which is part of the surveillance agency GCHQ.

The US and UK, in a joint statement, said the cyber-attack was aimed not just at the UK and US but globally. “Specifically, these cyber-exploits were directed at network infrastructure devices worldwide such as routers, switches, firewalls, network intrusion detection system,” it said.

“Russian state-sponsored actors are using compromised routers to conduct spoofing ‘man-in-the-middle’ attacks to support espionage, extract intellectual property, maintain persistent access to victim networks and potentially lay a foundation for future offensive operations.

“The current state of US and UK network devices, coupled with a Russian government campaign to exploit these devices, threatens our respective safety, security, and economic wellbeing.”

The US and UK have previously blamed Russia for cyber-attacks such as crippling attacks last year that created disruption worldwide, including to the National Health Service, and for a cyber-intrusion into the US energy grid.

But they portrayed this as far more serious because of the potential to undermine infrastructure. Millions of machines had been targeted in a “sustained” campaign and the US and UK admitted they still did not know the full extent to which the system had been compromised.

Previously the two nations have spoken only of attacks “originating from Russia”, with lines between Russian criminals and state activity being blurred, but they pinned blame on the Kremlin on this occasion.

The US and UK said they had “high confidence” that the Kremlin was behind the attack.

It is the first time they have issued joint advice to all sectors that might have been compromised, offering steps to to identify and neutralise potential problems relating to the attacks.

Ciaran Martin, the chief executive of the NCSC, which works closely with the surveillance agency GCHQ, said: “This is a very significant moment as we hold Russia to account.”

Howard Marshall, who works in the FBI’s cyber-division and who was on the conference call, said: “We will bring every tool to bear against them in every corner of cyberspace.”

The decision of the US and UK governments to go public reflects a loss of patience with Moscow after a series of cyber-attacks and hacks allegedly originating from within Russia. It could also be born out of frustration over Russia’s supposed interference in democratic elections in the US and Europe, its support for Syria’s Bashar al-Assad and incidents such as the use of a nerve agent in Salisbury.

Both the US and UK, like Russia, have cyber-offensive capabilities. The head of GCHQ, Jeremy Fleming, in his first public speech last week, described how such a capability was used to degrade Islamic State’s ability to disseminate propaganda from its Syrian headquarters in Raqqa. It was the first time that UK has admitted to having used its cyber-offensive capability.



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Cambridge Analytica scandal ‘highlights need for AI regulation’ | Technology

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Britain needs to lead the way on artificial intelligence regulation, in order to prevent companies such as Cambridge Analytica setting precedents for dangerous and unethical use of the technology, the head of the House of Lords select committee on AI has warned.

The Cambridge Analytica scandal, Lord Clement-Jones said, reinforced the committee’s findings, released on Monday in the report “AI in the UK: ready, willing and able?”

“These principles do come to life a little bit when you think about the Cambridge Analytica situation,” he told the Guardian. “Whether or not the data analytics they carried out was actually using AI … It gives an example of where it’s important that we do have strong intelligibility of what the hell is going on with our data.”

Clement-Jones added: “With the whole business in [the US] Congress and Cambridge Analytica, the political climate in the west now is much riper in terms of people agreeing to … a more public response to the ethics and so on involved. It isn’t just going to be left to Silicon Valley to decide the principles.”

At the core of the committee’s recommendations are five ethical principles which, it says, should be applied across sectors, nationally and internationally:

  • Artificial intelligence should be developed for the common good and benefit of humanity.
  • Artificial intelligence should operate on principles of intelligibility and fairness.
  • Artificial intelligence should not be used to diminish the data rights or privacy of individuals, families or communities.
  • All citizens should have the right to be educated to enable them to flourish mentally, emotionally and economically alongside artificial intelligence.
  • The autonomous power to hurt, destroy or deceive human beings should never be vested in artificial intelligence.

The goal is not to write the principles directly into legislation, Clement-Jones said, but rather to have them as a broad guiding beacon for AI regulation. “For instance, in the financial services area it would be the Financial Conduct Authority” that actually applied the principles, “and they would be looking at how insurance companies use algorithms to assess your premiums, how banks assess people for mortgages, and so on and so forth.

“Basically, these regulators have to make the connection with the ethics, and this is the way we think they should do it,” Clement-Jones said. “Of course, if in due course people are not observing these ethical principles and the regulator thinks that their powers are inadequate, then there may be a time down the track that we need to rethink this.”

In a wide-ranging report, the committee has identified a number of threats that mismanagement of AI could bring to Britain. One concern is of the creation of “data monopolies”, large multinational companies – generally American or Chinese, with Facebook, Google and Tencent all named as examples – with such a grip on the collection of data that they can build better AI than anyone else, enhancing their grip on the data sources and creating a virtuous cycle that renders smaller companies and nations unable to compete.

The report stops short of calling for active enforcement to prevent the creation of data monopolies, but does explicitly recommend that the Competition and Markets Authority “review proactively the use and potential monopolisation of data by the big technology companies operating in the UK”.

Clement-Jones said: “We want there to be an open market in AI, basically, and if all that happens is we get five or six major AI systems and you have to belong to one of them in order to survive in the modern world, well, that would be something that we don’t want to see.”



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