mfioretti: facebook*

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  1. This is ultimately the most important distinction between platforms and aggregators: platforms are powerful because they facilitate a relationship between 3rd-party suppliers and end users; aggregators, on the other hand, intermediate and control it.

    Moreover, at least in the case of Facebook and Google, the point of integration in their respective value chains is the network effect. This is what I was trying to get at last week in The Moat Map with my discussion of the internalization of network effects:

    Google has had the luxury of operating in an environment — the world wide web — that was by default completely open. That let the best technology win, and that win was augmented by the data that comes from serving an ever-increasing portion of the market. The end result was the integration of end users and the data feedback cycle that made Google search better and better the more it was used.
    Facebook’s differentiator, meanwhile, is the relationships between friends and family; the company has subsequently integrated that network effect with consumer attention, forcing all of the content providers to jostle for space in the Newsfeed as pure commodities.

    It’s worth noting, by the way, why it was Facebook could come to be a rival to Google in the first place; specifically, Facebook had exclusive data — those relationships and all of the behavior on Facebook’s site that resulted — that Google couldn’t get to. In other words, Facebook succeeded not by being a part of Google, but by being completely separate.
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  2. The digital wellness movement has spread through Silicon Valley like a Goop-ordained health trend since then. It received a big boost earlier this year when, facing backlash about fake news and Russian interference in the US elections, Mark Zuckerberg wrote in a Facebook post that the company would start to prioritize posts from your friends rather than media or brands. The post quoted “time well spent” verbatim.

    Zuckerberg dropped that line again during his two-day Congressional testimony, post-Cambridge Analytica, but people believed it sounded like a generally hollow sound byte. It was hard to believe people could meaningfully spend time on a platform that has been plagued for years with problems with Russian trolls, fake news, data-hoarding apps, surveillance tools, political censorship, discriminatory ad-targeting, and the means to incite genocide.

    But when Sundar Pichai, Google's CEO, offered a similar line yesterday—same old Android, just healthier—eyes didn't roll. Which is great for Google. By leading the charge with a public-facing digital wellness campaign, Google looks good without having to change much at all. Stark calls it “the lowest hanging of the low-hanging fruit.”

    The new Android features do help people (and Google) understand more about how they use their phones:
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  3. WELCOME to Connected Rights, your breach in the hull of digital rights news and analysis.

    MARK ZUCKERBERG’S APPEARANCE BEFORE EUROPEAN PARLIAMENT LEADERS yesterday was an absolute farce. With the world’s attention trained on them, the MEPs spent an hour grandstanding, landing all the predicted blows but at excessive length – the meeting was only supposed to last an hour or so. With eleventybillion specific questions stacked up and hardly any time to answer them, Zuck was free to pick and choose. “Are there any other themes we want to get through,” he mused to himself at one point, like someone contemplating which wine to have with dessert.

    Who is to blame? When Zuckerberg fled at the end leaving many specific questions unanswered, furious MEPs said Facebook had insisted on the stacked-questions format. However, some pointed out that this was the standard format for European Parliament hearings, and if MEPs wanted him to actually answer their questions, they should have insisted on another setup. GDPR architect Jan Philipp Albrecht told Politico that Zuckerberg would not have agreed to a format in which he had to answer every question directly after it was posed to him.
    Tags: , , , by M. Fioretti (2018-05-23)
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  4. We have just released the Santa Clara principles (PDF), calling on platforms to provide better information about how they moderate content online.

    The principles articulate a minimum set of standards for what information platforms should provide to users, what due process users should be able to expect when their posts are taken down or their accounts are suspended, and what data will be required to help ensure that the enforcement of company content guidelines is fair and unbiased. The three principles urge companies to:

    publish the numbers of posts removed and accounts permanently or temporarily suspended due to violations of their content guidelines;
    provide clear notice to all users about what types of content are prohibited, and clear notice to each affected user about the reason for the removal of their content or the suspension of their account; and
    enable users to engage in a meaningful and timely appeals process for any content removals or account suspensions.

    These principles were developed in collaboration digital rights organizations and civil society groups after the Content Moderation and Removal at Scale conference at Santa Clara University in February 2018. They incorporate research we’ve been working on as part of a grant from the Internet Policy Observatory, and my ongoing work funded by the Australian Research Council.
    What proportion of content is removed?

    As researchers, we need better information in order to study how well content moderation systems are working. As part of our research, we’ve been tracking how the content moderation processes of major platforms are actually working in practice. We’re using this information to evaluate these systems for bias, in a way that we can monitor improvements over time. We’ve created some very simple dashboards to help people explore this data — linked under each graph below.

    This data gives us a rare overview of the scale of content moderation on major platforms. We can see, for example, that somewhere around 7–9% of tweets are no longer available two weeks after they have been posted. We can also see trends in content censored in certain countries (Turkey and Germany are the biggest censors of tweets):
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  5. rom this mis-diagnosis flows a proposed solution: limit Facebook and Google’s access to our personal data and/or ensure others have access to that personal data on equal terms (“data portability”). Data portability means almost nothing in a world where you have a dominant network. So what if I can get my data out of Facebook if no other network has a critical mass of participants. What is needed is that Facebook has a live, open read/write API that allows other platforms to connect if authorized by the user.

    In fact, personal data is a practical irrelevancies to the monopoly issue. Focusing on it serves only to distract us from the real solutions.

    Limiting Facebook’s and Google’s access to our personal data or making it more portable would make very little difference to their monopoly power, or reduce the deleterious effects of that power on innovation and freedom — the key freedoms of enterprise, choice and thought.

    It make little difference because their monopoly just doesn’t arise from their access to our personal data. Instead it comes from massive economies of scale (costless copying) plus platform effects. If you removed Google’s and Facebook’s ability to use personal data to target ads tomorrow it would make very little difference to their top or bottom lines because their monopoly on our attention would be little changed and their ad targeting would be little diminished — in Google’s case the fact you type in a specific search from a particular location is already enough to target effectively and similar Facebook’s knowledge of your broad demographic characteristics would be enough given the lock-hold they have on our online attention.

    What is needed in Google’s case is openness of the platform and in Facebook’s openness combined with guaranteed interoperability (“data portability” means little if everyone is on Facebook!).

    Worse, focusing on privacy actually reinforces their monopoly position. It does so because privacy concerns:

    Increase compliance costs which burden less wealthy competitors disproportionately. In particular, increased compliance costs make it harder for new firms to enter the market. A classic example is the “right to be forgotten” which actually makes it harder for alternative search firms to compete with Google.
    Make it harder to get (permitted) access to user data on the platform and it is precisely (user-permitted) read/write access to a platform’s data that is the best chance for competition. In fact, it now gives monopolists the perfect excuse to deny such access: Facebook can now deny other competing firms (user-permitted) access to user data citing “privacy concerns”.

    Similarly, the idea sometimes put forward that we just need another open-source decentralized social network is completely implausible (even if run by Tim Berners-Lee*).

    Platforms/networks like Facebook tend to standardize: witness phone networks, postal networks, electricity networks and even the Internet. We don’t want lots of incompatible social networks. We want one open one — just like we have one open Internet.

    In addition, the idea that some open-source decentralized effort is going to take on an entrenched highly resourced monopoly on its own is ludicrous (the only hope would be if there was serious state assistance and regulation — just in the way that China got its own social networks by effectively excluding Facebook).

    Instead, in the case of Facebook we need to address the monopoly at root: networks like this will always tend to standardization. The solution is ensure that we get an open rather than closed, proprietary global social network — just like we got with the open Internet.

    Right now that would mean enforcing equal access rights to facebook API for competitors or, enforcing full open sourcing of key parts of the software and tech stack plus getting guarantees ongoing non-discriminatory API access.

    Even more importantly we need to prevent these kind of monopolies in future — we want to stop shutting the door after the horse has bolted! This means systematic funding of open protocols and platforms. By open i mean the software, algorithms and non-personal data are open. And we need to fund the innovators who create and develop these and the way to do that is replacing patents/copyright with remuneration rights.
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  6. The research was, as the study puts it, “premised on the notion that ad transparency undermines ad effectiveness when it exposes marketing practices that violate consumers’ beliefs about ‘information flows’ — how their information ought to move between parties.” So if a clothing store asks you for your email address so that it can send you promotional spam, you may not enjoy it, but you probably won’t consider it a breach of trust. But if that same store were, say, covertly following your movements between the aisles by tracking your cellphone, that would be unnerving, to say the least. Given that Facebook operates its advertising operation largely on the basis of data harvesting that’s conducted invisibly or behind the veil of trade secrecy, it has more in common with our creepy hypothetical retailer.

    as John explained via email, “If I have to see ads, then yeah, I’d generally prefer ones that are relevant than not relevant but I’d add the qualifier: as long as I get the sense that you are treating my personal information properly. As soon as people feel that you are violating their privacy, they can become uneasy and understandably, distrustful of you.” Zuckerberg’s claim that you prefer to have your most personal information and online behavior tracked and analyzed on an industrial scale probably only checks out if you’re unaware it’s happening.

    Assuming the validity of the research here, it’s no wonder Facebook doesn’t want to show its math: The ads that are its lifeblood will stop working as well. John agreed that “there’s a disincentive for firms to reveal unsavory information flows, so that could plausibly explain trying to hide it.” Facebook is, after all, one big, world-spanning, unsavory information flow.
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  7. The company’s financial performance is more of a reflection of Facebook’s unstoppability than its cause. Despite personal reservations about Facebook’s interwoven privacy, data, and advertising practices, the vast majority of people find that they can’t (and don’t want to) quit. Facebook has rewired people’s lives, routing them through its servers, and to disentangle would require major sacrifice. And even if one could get free of the service, the social pathways that existed before Facebook have shriveled up, like the towns along the roads that preceded the interstate highway system. Just look at how the very meaning of the telephone call has changed as we’ve expanded the number of ways we talk with each other. A method of communication that was universally seen as a great way of exchanging information has been transformed into a rarity reserved for close friends, special occasions, emergencies, and debt collectors.

    Most of the general pressures on the internet industry’s data practices, whether from Europe or anywhere else, don’t seem to scare Facebook. Their relative position will still be secure, unless something radical changes. In the company’s conference call with analysts last week, Sheryl Sandberg summed it up.

    “The thing that won’t change is that advertisers are going to look at the highest return-on-investment » opportunity,” Sandberg said. “And what’s most important in winning budgets is relative performance in the industry.”

    As long as dollars going into the Facebook ad machine sell products, dollars will keep going into the Facebook ad machine.

    As long as their friends are still on Instagram, Facebook, and WhatsApp, people will keep using Facebook products.
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  8. Un altro dei possibili punti di contesa è probabilmente legato alla pubblicità e alla condivisione di dati tra Whatsapp e Facebook. Al momento non sappiamo se la casa madre intenda introdurre inserzioni sulla app di messaggistica, una mossa che è stata sempre osteggiata da Koum e Acton. All’epoca della acquisizione i due cofondatori avevano ricevuto rassicurazioni sul fatto che non sarebbe stata aggiunta.

    Ma un anno e mezzo dopo Facebook ha convinto Whatsapp a cambiare i suoi termini di servizio per ottenere i numeri di telefono dei suoi utenti e inviare loro pubblicità mirata sul social (non sulla base delle loro conversazioni Whatsapp, che restavano inaccessibili all’azienda; ma sulla base del loro numero di telefono, che permetteva di farli trovare ad aziende che avevano liste di clienti e di loro cellulari, e che volevano raggiungerli con delle promozioni su Facebook).

    Nel maggio 2017 l’Unione europea ha multato Facebook con 110 milioni di euro per aver fornito informazioni fuorvianti al tempo dell’acquisizione di Whatsapp. Nel 2014 infatti il social aveva sostenuto che non avrebbe potuto collegare in modo automatico gli account degli utenti della app di messaggistica con i propri.

    Nello stesso periodo anche l’Autorità Garante della Concorrenza e del Mercato, in Italia, sanzionava Whatsapp per 3 milioni di euro, per aver indotto gli utenti “ad accettare integralmente i nuovi Termini di Utilizzo, in particolare la condivisione dei propri dati con Facebook, facendo loro credere che sarebbe stato, altrimenti, impossibile proseguire nell’uso dell’applicazione”.
    II futuro dopo Koum

    Alla base dell’uscita dei due cofondatori sembra esserci soprattutto uno scontro culturale fra il modello Whatsapp, che punta sull’idea di privacy, e il modello Facebook, che punta sull’utilizzo dei dati degli utenti per guadagnare con la pubblicità. E malgrado Facebook avesse vinto alcuni passaggi cruciali – come l’abbandono della sottoscrizione da 0,99 centesimi per Whatsapp (che era stata introdotta per nuovi utenti) o il cambio di termini di servizio ecc - i due cofondatori resistevano a modifiche più radicali. Che d’ora in poi potrebbero non trovare più ostacoli.

    Ma tutto ciò potrebbe anche essere un boomerang per Whatsapp. Non sembra il momento migliore per svendere la propria identità di servizio orientato alla privacy. Non a caso all’inizio del 2018 Acton ha deciso di mettere 50 milioni di dollari in Signal, la app cifrata, di nicchia ma apprezzatissima dalla comunità tecnologica, sul cui protocollo si basa la stessa cifratura di Whatsapp (di fatto i milioni li ha messi nella Signal Foundation, no-profit che dovrà ampliare la missione della app di “rendere più accessibili e ubique le comunicazioni private”).

    Nel contempo l’altra appcifrata più nota, Telegram, si erge (almeno a livello di immagine e marketing, non sulla qualità della cifratura e della sua implementazione) a paladina della libertà di espressione e della privacy, facendosi mettere al bando in Russia. In questo scenario, c’è da scommettere che difficilmente Koum se ne starà a lungo a giocare con le Porsche.
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  9. “For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.”

    Facebook also addresses when other people use your “IP content:

    “When you publish content or information using the Public setting, it means that you are allowing everyone, including people off of Facebook, to access and use that information, and to associate it with you (i.e., your name and profile picture).”
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  10. Any of you who administrate a Facebook page for a business or non-profit will know that unless you pay, Facebook’s algorithm will bury your posts. Some other points Mendelson makes in the interview:

    A 1% click through rate on a paid post is often as good as it gets.
    Eighty percent of Facebook users are outside of the U.S. If you’re a local business, like say a plant nursery, what good is paying to reach someone in Latvia?
    Bots equal 60% of internet traffic (something to think about when looking at your stats).
    What happens if you rely on Facebook as a platform for your business and, like so many other internet companies of the past, Facebook goes out of business?

    To illustrate how social media companies exaggerate their advertising power Mendelson offers a personal example. He has 700,000 Twitter followers. When he sent out a tweet about his new book he sold, not hundreds or thousands of copies, but exactly 28. A tweet to his 700,000 Twitter followers asking for a donation to a breast cancer charity netted just $1. While acknowledging that social media can, occasionally, be an effective advertising medium, for most of us it’s probably a big waste of time.
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