Loot boxes in games are gambling and should be banned for kids, say UK MPs – gpgmail


UK MPs have called for the government to regulate the games industry’s use of loot boxes under current gambling legislation — urging a blanket ban on the sale of loot boxes to players who are children.

Kids should instead be able to earn in-game credits to unlock look boxes, MPs have suggested in a recommendation that won’t be music to the games industry’s ears.

Loot boxes refer to virtual items in games that can be bought with real-world money and do not reveal their contents in advance. The MPs argue the mechanic should be considered games of chance played for money’s worth and regulated by the UK Gambling Act.

The Department for Digital, Culture, Media and Sport’s (DCMS) parliamentary committee makes the recommendations in a report published today following an enquiry into immersive and addictive technologies that saw it take evidence from a number of tech companies including Fortnite maker Epic Games; Facebook-owned Instagram; and Snapchap.

The committee said it found representatives from the games industry to be “wilfully obtuse” in answering questions about typical patterns of play — data the report emphasizes is necessary for proper understanding of how players are engaging with games — as well as calling out some games and social media company representatives for demonstrating “a lack of honesty and transparency”, leading it to question what the companies have to hide.

“The potential harms outlined in this report can be considered the direct result of the way in which the ‘attention economy’ is driven by the objective of maximising user engagement,” the committee writes in a summary of the report which it says explores “how data-rich immersive technologies are driven by business models that combine people’s data with design practices to have powerful psychological effects”.

As well as trying to pry information about of games companies, MPs also took evidence from gamers during the course of the enquiry.

In one instance the committee heard that a gamer spent up to £1,000 per year on loot box mechanics in Electronic Arts’s Fifa series.

A member of the public also reported that their adult son had built up debts of more than £50,000 through spending on microtransactions in online game RuneScape. The maker of that game, Jagex, told the committee that players “can potentially spend up to £1,000 a week or £5,000 a month”.

In addition to calling for gambling law to be applied to the industry’s lucrative loot box mechanic, the report calls on games makers to face up to responsibilities to protect players from potential harms, saying research into possible negative psychosocial harms has been hampered by the industry’s unwillingness to share play data.

“Data on how long people play games for is essential to understand what normal and healthy — and, conversely, abnormal and potentially unhealthy — engagement with gaming looks like. Games companies collect this information for their own marketing and design purposes; however, in evidence to us, representatives from the games industry were wilfully obtuse in answering our questions about typical patterns of play,” it writes.

“Although the vast majority of people who play games find it a positive experience, the minority who struggle to maintain control over how much they are playing experience serious consequences for them and their loved ones. At present, the games industry has not sufficiently accepted responsibility for either understanding or preventing this harm. Moreover, both policy-making and potential industry interventions are being hindered by a lack of robust evidence, which in part stems from companies’ unwillingness to share data about patterns of play.”

The report recommends the government require games makers share aggregated player data with researchers, with the committee calling for a new regulator to oversee a levy on the industry to fund independent academic research — including into ‘Gaming disorder‘, an addictive condition formally designated by the World Health Organization — and to ensure that “the relevant data is made available from the industry to enable it to be effective”.

“Social media platforms and online games makers are locked in a relentless battle to capture ever more of people’s attention, time and money. Their business models are built on this, but it’s time for them to be more responsible in dealing with the harms these technologies can cause for some users,” said DCMS committee chair, Damian Collins, in a statement.

“Loot boxes are particularly lucrative for games companies but come at a high cost, particularly for problem gamblers, while exposing children to potential harm. Buying a loot box is playing a game of chance and it is high time the gambling laws caught up. We challenge the Government to explain why loot boxes should be exempt from the Gambling Act.

“Gaming contributes to a global industry that generates billions in revenue. It is unacceptable that some companies with millions of users and children among them should be so ill-equipped to talk to us about the potential harm of their products. Gaming disorder based on excessive and addictive game play has been recognised by the World Health Organisation. It’s time for games companies to use the huge quantities of data they gather about their players, to do more to proactively identify vulnerable gamers.”

The committee wants independent research to inform the development of a behavioural design code of practice for online services. “This should be developed within an adequate timeframe to inform the future online harms regulator’s work around ‘designed addiction’ and ‘excessive screen time’,” it writes, citing the government’s plan for a new Internet regulator for online harms.

MPs are also concerned about the lack of robust age verification to keep children off age-restricted platforms and games.

The report identifies inconsistencies in the games industry’s ‘age-ratings’ stemming from self-regulation around the distribution of games (such as online games not being subject to a legally enforceable age-rating system, meaning voluntary ratings are used instead).

“Games companies should not assume that the responsibility to enforce age-ratings applies exclusively to the main delivery platforms: All companies and platforms that are making games available online should uphold the highest standards of enforcing age-ratings,” the committee writes on that.

“Both games companies and the social media platforms need to establish effective age verification tools. They currently do not exist on any of the major platforms which rely on self-certification from children and adults,” Collins adds.

During the enquiry it emerged that the UK government is working with tech companies including Snap to try to devise a centralized system for age verification for online platforms.

A section of the report on Effective Age Verification cites testimony from deputy information commissioner Steve Wood raising concerns about any move towards “wide-spread age verification [by] collecting hard identifiers from people, like scans of passports”.

Wood instead pointed the committee towards technological alternatives, such as age estimation, which he said uses “algorithms running behind the scenes using different types of data linked to the self-declaration of the age to work out whether this person is the age they say they are when they are on the platform”.

Snapchat’s Will Scougal also told the committee that its platform is able to monitor user signals to ensure users are the appropriate age — by tracking behavior and activity; location; and connections between users to flag a user as potentially underage. 

The report also makes a recommendation on deepfake content, with the committee saying that malicious creation and distribution of deepfake videos should be regarded as harmful content.

“The release of content like this could try to influence the outcome of elections and undermine people’s public reputation,” it warns. “Social media platforms should have clear policies in place for the removal of deepfakes. In the UK, the Government should include action against deepfakes as part of the duty of care social media companies should exercise in the interests of their users, as set out in the Online Harms White Paper.”

“Social media firms need to take action against known deepfake films, particularly when they have been designed to distort the appearance of people in an attempt to maliciously damage their public reputation, as was seen with the recent film of the Speaker of the US House of Representatives, Nancy Pelosi,” adds Collins.


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Tech startups want to destigmatize sex – gpgmail


Sex, despite being one of the most fundamental human experiences, is still one of those businesses that some advertisers reject, banks are hesitant to financially support and some investors don’t want to fund.

Given how sex is such a huge part of our lives, it’s no surprise founders are looking to capitalize on the space. But the idea of pleasure versus function, plus the stigma still associated with all-things sex, is at the root of the barriers some startup founders face.

Just last month, Samsung was forced to apologize to sextech startup Lioness after it wrongfully asked the company to take down its booth at an event it was co-hosting. Lioness is a smart vibrator that aims to improve orgasms through biofeedback data.

Sextech companies that relate to the ability to reproduce or, the ability to not reproduce, don’t always face the same problems when it comes to everything from social acceptance to advertising to raising venture funding. It seems to come down to the distinction between pleasure and function, stigma and the patriarchy. 

This is where the trajectories for sextech startups can diverge. Some startups have raised hundreds of millions from traditional investors in Silicon Valley while others have struggled to raise any funding at all. As one startup founder tells me, “Sand Hill Road was a big no.”

A market worth billions or trillions?




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Spotify users can now share music and podcasts to Snapchat – gpgmail


Spotify users can now share their favorite music and podcasts with friends on Snapchat, the company announced this morning, with added support for sharing a song, playlist, artist profile, or podcast either directly to your friends on Snapchat or to your Snapchat Story.

Snapchat is now one of several destinations that Spotify users can share to, along with WhatsApp, Messages, Messenger, Twitter, Instagram Stories, and as of just last week, Facebook Stories.

Using the new feature is same as with any other sharing option — you tap the three-dot share menu in the top right of the app’s interface, and choose Snapchat from the dropdown list. Snapchat will open with a new Snap and the full album art included. You can then edit and send the Snap as usual.

Recipients of your Snap will be able to tap the context card to listen to the music or podcast you’ve shared.

In addition to simply sharing music with friends, the feature will also make it possible for Spotify artists and their teams to promote their music to Snapcat’s 203 million daily users — most of who are well-within the coveted teen to young adult demographic that Spotify’s artists are hoping to reach.

The feature itself is powered by Snap’s Creative Kit (a part of Snap Kit), which lets users share media from a developer’s app or website.

Spotify is now one of over 200 apps that have integrated with Snap Kit following the June 2018 debut of the platform, which aims to offer a more private alternative to Facebook. In many cases, however, support for Snapchat is being added to other apps and sites alongside their existing support for Facebook and Instagram — as in the case here.

The expansion to Spotify’s sharing feature comes at a time when the streamer is looking for growth — especially in light of growing competition from rivals like Amazon Music and Apple Music. The former benefits from integrations with Prime and Alexa while the latter from its preinstallation on Apple devices. (And possibly a new bundle with Apple TV+, as we’ll find out tomorrow at Apple’s iPhone event.)

Spotify, meanwhile, notably missed its user estimates in its Q2 2019 earnings, with 8 million new subscribers in the quarter instead of the expected 8.5 million. With expanded social sharing options, it hopes to reach millions more users who may later convert to paying customers.


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Facebook Dating launches in the U.S., adds Instagram integration – gpgmail


Are Americans ready to trust Facebook with their dating life? Barely more than a month has passed since the U.S. Federal Trade Commission fined Facebook a record $5 billion over its privacy lapses, and imposed a modified corporate structure to hold the company more accountable for its decisions over user privacy. In the wake of this historic action, Facebook’s brand-new dating product is today launching to all in the U.S., promising to leverage the company’s deep insight into people’s personal data to deliver better matches than rival dating apps like Tinder, Bumble, Match and others.

With its U.S. arrival, Facebook Dating will now also allow users to integrate their Instagram posts in their dating profile and add their Instagram followers to their “Secret Crush” list, in addition to Facebook friends.

By year-end, Facebook Dating users will be able to select which Facebook or Instagram Stories they want to add to their dating profile.

FB and IG Stories

Trusting Facebook to find your match

Though the U.S. is the 20th market for Facebook Dating, it’s one of the most important for the product, which was first announced at the company’s F8 developer conference last year.

The new service represents a significant step toward making Facebook a tool for connecting with people who aren’t just friends or family.

This is an area where the company is now heavily invested. The Facebook Groups product, used by a billion people on a monthly basis, connects users by similar interests or by geographic location, as with its neighborhood groups. The company also launched Facebook at Work a few years ago to allow businesses to build their own networks on top of Facebook infrastructure.

Arguably, none of these efforts require as much trust as opening up your Facebook data — to a company known for its mishandling — in the hopes of finding love.

Entry Points 2 DF

Facebook, well aware of the potential privacy pitfalls in such a product, has taken a number of steps to lock down the Facebook Dating experience so you’re not unwittingly outed to family or friends, or to work colleagues and other professional acquaintances. (Or, you know, to your spouse or significant other.)

For starters, the people you’re shown on Facebook Dating will not include your Facebook Friends. You can also opt to have Facebook Dating only show you those people where you don’t have any friends in common, for another layer of protection. And you can pre-emptively block people from seeing your profile on Facebook Dating — which may work well as a way to ensure an ex’s profile never, ever comes up and to make sure they never see yours.

And of course, Dating is an opt-in experience.

Privacy DF

Your profile will never be visible to friends anywhere or to any people not on Facebook Dating, and it won’t appear in the News Feed. With the newly added Instagram integration, only your photos will be shown — not your Instagram handle.

However, there is still a way to add a Facebook friend as a “Secret Crush,” which will only be revealed if the interest is mutual. People are also limited to nine “crushes,” to prevent abuse of the feature. This now extends to Instagram followers, too, with the U.S. launch.

Profile Creation 1 DF

The product, which lives within the main Facebook app, also allows you to connect with people attending the same events or who participate in the same groups — though this is off by default and can be enabled on a one-by-one basis.

Beyond that, however, Facebook Dating will present you with a set of profiles based on other factors — mutual friends (if enabled), mutual groups (if enabled), mutual schools and other, unknown factors.

Profile Creation DF

This is where things get tricky.

Facebook, of course, has been known to be eerily accurate with its friend recommendations — so much so that some people believed it had to have been spying on them. (As it turned out, Facebook did know more about who you were connecting with than people had realized.)

In terms of Facebook Dating’s recommendations, it’s unclear what “other” data, specifically, Facebook will be using.

Officially, Facebook says that match suggestions are based on “your preferences, interests, and other things you do on Facebook.”

Asked how exactly Facebook will rank its profile suggestions, Nathan Sharp, the Product Lead for Facebook Dating, said he can’t discuss the details of the system.

What I can say is that, in terms of privacy, none of the people you would see or encounter would be divulging any sort of information,” he explains. “So, if you and Taylor, for example, had gone to the same college, but you’d never posted that on your dating profile, you may be up-ranked. But Taylor would never see what college you went to and you would never see what college Taylor went to,” says Sharp. 

Sharp notes that people may discover their mutualities — like sharing the same alma mater, for instance — naturally, through conversations had within Facebook Dating chat.

EventsandGroups multiple 1

Though it’s not unusual for a dating app maker to be tight-lipped about its secret sauce, the amount of data Facebook has to play with here is a competitive advantage and possibly a cause for concern as users are in control of what profile data Facebook is using behind-the-scenes.

On Tinder, you may write that you “love hiking,” but Facebook would know if you actually participated in hiking-related groups or events, and how often. It may know a lot more, too — like your check-ins to hiking trails, if there are mountains in your photos, if you posted updates with the keyword “hiking,” if you “Liked” Facebook Pages about hiking, etc. But Facebook won’t confirm if this sort of data is used or how.

If people can look past the uncertainty around Facebook’s use of their personal data — and that’s a huge unknown for the U.S. market — the product itself has several advantages.

Facebook Dating’s larger goal is to make matchmaking feel personal again. It aims to remind people there’s a real person behind these profiles. That dating is not meant to be a game. This could be a big differentiator from a market tired of but still committed to using dating apps.

The issue is that today’s dating apps aren’t incentivized to help people make long-lasting connections — after all, people who find a relationship abandon their dating service. That’s bad for the apps’ bottom line. What better, then, but to double down on the “single lifestyle,” as Tinder is now doing, to ensure users stick around?

Facebook, on the other hand, isn’t exactly worried about user churn. With the social network’s 2.4 billion monthly users, it has the bandwidth to make dating an additive feature. Its sheer numbers also mean the potential for a far larger pool of daters, including those who wouldn’t otherwise think to join a dating app.

Another advantage is that Facebook is a company that knows how to build a compelling user experience. It shines in the details on Facebook Dating — like how easily it flows you into a gender identification screen at setup, or how it gives you a way to quickly share your live location for first-date safety with a trusted friend on Messenger .

It’s cracking down on the sending of unsolicited photos and porn-bot spam that plague dating apps, by limiting chats to text and GIFs only. That means no links, photos, payments or videos can be shared in messages.

And when Story integration goes live by year-end, checking out daters’ less-polished updates may become a new favorite activity.

Gender Identity Flow

Finally, because its raison d’être is not (for now at least) direct monetization of core dating features — like messaging or returning to a profile you accidentally swiped past — Facebook can create a free product where you’re not limited by the app’s need to squeeze you for dollars.

PauseMatch SecondLook DFThat said, the product can’t help but borrow from Tinder, with its set of rounded like/dislike buttons (why is there never a maybe?), photo-centric profiles that reward the genetically blessed, the integrated private chat and now Instagram integration, too.

Instagram Posts

In addition to the U.S., Facebook Dating is live already in Argentina, Bolivia, Brazil, Canada, Chile, Columbia, Ecuador, Guyana, Laos, Malaysia, Mexico, Paraguay, Peru, the Philippines, Singapore, Suriname, Thailand, Uruguay and Vietnam. It will be in Europe by early 2020. 

The company won’t say how many users are on the Dating product so far, but claims it’s “doing well.”

Facebook Dating is rolling out to users 18 and over in the U.S. starting today.


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Pandora now lets you share music and podcasts to your Instagram Stories – gpgmail


Pandora today announced a new integration with Instagram that will allow users to share their favorite music and podcasts to their Instagram Story. The feature comes well over a year after Spotify launched a similar integration with Instagram Stories, and only days after Spotify introduced sharing to Facebook Stories, as well.

In Pandora’s case, accessing the feature is also a quick and easy process — you just tap the “Share” button from the Now Playing screen in the app, then choose “Instagram Stories” as the destination.

A cover art card for the music or podcast will then be generated on your Instagram Story, which you can further decorate with text and stickers, as usual. You can also choose to send the story as a direct message to a friend or a group chat, instead of all your followers.

Where Pandora’s experience differs from Spotify’s is what happens when that story is viewed.

When a friend taps the “Play on Pandora” button from the Instagram story, they can gain direct access to that content — even if they don’t have a Premium account. Those who aren’t paid subscribers will be able to view a short ad then gain access to both the shared content as well as a session of free, unlimited, on-demand music.

This is made possible through Pandora’s Premium Access ad solution, which rewards users for watching video ads with free, on-demand sessions.

That means Pandora’s take on Instagram sharing won’t just be useful to artists looking to promote their music, or fans looking to engage their friends — it will also potentially serve as a way to convert free users to paid subscribers after they get a free taste of what Pandora has to offer.

The feature can also be used to promote podcasts, which a newer battleground between Spotify and Pandora these days. The former has spent on acquisitions and hosts a number of exclusive shows while Pandora is now benefitting from new owner’s SiriusXM’s talk radio programming and its own “Genome” classification technology. 

Pandora says the Instagram Story sharing feature is launching today for select users, and will support sharing songs, albums, podcasts, and playlists.

It’s rolling out to a limited number of Pandora users to start, and will gradually reach the rest of the user base in the weeks ahead.


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Now Facebook says it may remove Like counts – gpgmail


Facebook could soon start hiding the Like counter on News Feed posts to protect users’ from envy and dissuade them from self-censorship. Instagram is already testing this in 7 countries including Canada and Brazil, showing a post’s audience just a few names of mutual friends who’ve Liked it instead of the total number. The idea is to prevent users from destructively comparing themselves to others and potentially feeing inadequate if their posts don’t get as many Likes. It could also stop users from deleting posts they think aren’t getting enough Likes or not sharing in the first place.

Facebook prototypes hiding like counts [via Jane Manchun Wong]

Reverse engineering master Jane Manchun Wong spotted Facebook prototyping the hidden Like counts in its Android app. When we asked Facebook, the company confirmed to gpgmail that it’s considering testing removal of Like counts. However it’s not live for users yet. Facebook declined to share results from the Instagram Like hiding tests, its exact motives, or any schedule for starting testing.

Still, the prototype might indicate positive results from hiding Like tallies in Instagram, which we first reported in April after it was spotted by Wong there as well. After beginning testing in Canada later that month. Instagram added Brazil, Australia, New Zealand, Italy, Ireland, and Japan to the test in July. There, a post’s author can still see the Like total, but everyone else can’t. The expansion of that Instagram test and Facebook potentially trying it in its own app signals that it might have positive or negligible impacts on sharing while aiding mental health, or at least be worth a slight drop in engagement.

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Instagram is already testing hiding Like counts and Facebook may soon do the same.

Facebook has gradually been relegated to the place for sharing showy life events like marriages or new jobs while Instagram and Snapchat take over for day-to-day sharing. The problem is that people have so many fewer of those big moments, and the large Like counts they attract can make other users self-conscious of their of own lives and content. That’s all problematic for Facebook’s ad views. Facebook wants to avoid scenarios such as “Look how many Likes they get. My life is lame in comparison” or “why even share if it’s not going to get as many Likes as her post and people will think I’m unpopular”.

Removing Like counts could put less pressure on users and encourage them to share more freely and frequently, as I wrote in 2017. It could also obscure Facebook’s own potential decline in popularity as users switch to other apps. Posts not getting as many Likes as they used to could hasten the exodus.




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Instagram may allow creators to syndicate IGTV videos to Facebook – gpgmail


Following the departure of Instagram’s founders, Facebook is working to more closely integrate the photo-sharing app with its flagship social network. It’s already added its brand name next to Instagram’s, and is working to make both platforms’ messaging products interoperable. Now, Facebook is prototyping a means of syndicating Instagram’s IGTV video to Facebook’s video site, Facebook Watch.

In another find from noted reverse engineer, Jane Manchun Wong, Instagram was found to have under development a feature that would allow Instagram users to post their IGTV content to both Instagram as a preview, as well as to Facebook and Watch — the latter by toggling an additional switch labeled “make visible on Facebook.”

Wong says the feature is still in the prototype stage, as the buttons themselves aren’t functional.

This move, should it come to pass, could prompt more video creators to use IGTV, given that it would boost their videos’ distribution by also including Facebook as a destination for their content. The videos could also be part of an ongoing, episodic series, Wong had found.

This, in turn, could help IGTV — an app which hasn’t quite taken off as a standalone video platform. Today, IGTV takes inspiration from TikTok and Snapchat’s vertical video. It’s meant to engage Instagram users with longer-form, portrait mode video content but within Instagram and in a separate IGTV app. But IGTV has often been filled with poorly cropped and imported web video, rather than content designed specifically for the platform.

Meanwhile, the IGTV app has struggled to rise to the top of the App Store’s charts the way its parent, Instagram has. Today, it’s ranked No. 159 in the Photo & Video category on the App Store, and unranked in the Overall top charts.

To address some of the issues that creators have complained about, Instagram this week rolled out a few changes to the upload experience. This included the new ability to select the 1:1 crop of an IGTV thumbnail for the creator’s Profile Cover as well as the ability to edit which 5:4 section of the IGTV video shows in the Feed.

IGTV will also now auto-populate Instagram handles and tags on IGTV titles and descriptions, and will now support the ability to longer video from mobile. With the latter change, IGTV has increased the minimum threshold to upload on mobile to one minute, and is allowing mobile uploads up to 15 minutes.

Instagram declined to comment on the possible syndication of IGTV content to Facebook and Facebook Watch.




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Snapchat beats a dead horse – gpgmail


Hey. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on gpgmail this week to surface my favorites for your reading pleasure.

Last week, I talked about how Netflix might have some rough times ahead as Disney barrels towards it.


The big story

There is plenty to be said about the potential of smart glasses. I write about them at length for gpgmail and I’ve talked to a lot of founders doing cool stuff. That being said, I don’t have any idea what Snap is doing with the introduction of a third-generation of its Spectacles video sunglasses.

The first-gen were a marketing smash hit, their sales proved to be a major failure for the company which bet big and seemingly walked away with a landfill’s worth of the glasses.

Snap’s latest version of Spectacles were announced in Vogue this week, they are much more expensive at $380 and their main feature is that they have two cameras which capture images in light depth which can lead to these cute little 3D boomerangs. One one hand, it’s nice to see the company showing perseverance with a tough market, on the other it’s kind of funny to see them push the same rock up the hill again.

Snap is having an awesome 2019 after a laughably bad 2018, the stock has recovered from record lows and is trading in its IPO price wheelhouse. It seems like they’re ripe for something new and exciting, not beautiful yet iterative.

The $150 Spectacles 2 are still for sale, though they seem quite a bit dated-looking at this point. Spectacles 3 seem to be geared entirely towards women, and I’m sure they made that call after seeing the active users of previous generations, but given the write-down they took on the first-generation, something tells me that Snap’s continued experimentation here is borne out of some stubbornness form Spiegel and the higher-ups who want the Snap brand to live in a high fashion world and want to be at the forefront of an AR industry that seems to have already moved onto different things.

Send me feedback
on Twitter @lucasmtny or email
lucas@Gpgmail.com

On to the rest of the week’s news.

tumblr phone sold

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

  • WordPress buys Tumblr for chump change
    Tumblr, a game-changing blogging network that shifted online habits and exited for $1.1 billion just changed hands after Verizon (which owns gpgmail) unloaded the property for a reported $3 million. Read more about this nightmarish deal here.
  • Trump gives American hardware a holiday season pass on tariffs 
    The ongoing trade war with China generally seems to be rough news for American companies deeply intertwined with the manufacturing centers there, but Trump is giving U.S. companies a Christmas reprieve from the tariffs, allowing certain types of hardware to be exempt from the recent rate increases through December. Read more here.
  • Facebook loses one last acquisition co-founder
    This week, the final remnant of Facebook’s major acquisitions left the company. Oculus co-founder Nate Mitchell announced he was leaving. Now, Instagram, WhatsApp and Oculus are all helmed by Facebook leadership and not a single co-founder from the three companies remains onboard. Read more here.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

  1. Facebook’s turn in audio transcription debacle:
    [Facebook transcribed users’ audio messages without permission]
  2. Google’s hate speech detection algorithms get critiqued:
    [Racial bias observed in hate speech detection algorithm from Google]
  3. Amazon has a little email mishap:
    [Amazon customers say they received emails for other people’s orders]

Adam Neumann (WeWork) at gpgmail Disrupt NY 2017

Extra Crunch

Our premium subscription service had another week of interesting deep dives. My colleague Danny Crichton wrote about the “tech” conundrum that is WeWork and the questions that are still unanswered after the company filed documents this week to go public.

…How is margin changing at its older locations? How is margin changing as it opens up in places like India, with very different costs and revenues? How do those margins change over time as a property matures? WeWork spills serious amounts of ink saying that these numbers do get better … without seemingly being willing to actually offer up the numbers themselves…

Here are some of our other top reads this week for premium subscribers. This week, we published a major deep dive into the world’s next music unicorn and we dug deep into marketplace startups.

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Netflix’s big problem and Apple’s thinnest product yet – gpgmail


Hey. This is Week-in-Review, where I give a heavy amount of analysis and/or rambling thoughts on one story while scouring the rest of the hundreds of stories that emerged on gpgmail this week to surface my favorites for your reading pleasure.

Last week, I talked about the Capital One breach and how Equifax taught us that irresponsible actions only affect companies in the PR department.


Thomas Trutschel/Photothek via Getty Images

The big story

Disney is going to eat Netflix’s lunch.

The content giant announced this week that when Disney+ launches, it will be shipping a $12.99 bundle that brings its Disney+ streaming service, ESPN+ and ad-supported Hulu together into a single-pay package. That price brings those three services together for the same cost as Netflix and is $5 cheaper that what you would spend on each of the services individually.

This announcement from Disney comes after Netflix stuttered in its most recent earnings, missing big on its subscriber add while actually losing subscribers in the U.S.

Netflix isn’t the aggregator it once was; its library is consistently shifting, with original series taking the dominant position. As much as Netflix is spending on content, there’s simply no way that it can operate on the same plane as Disney, which has been making massive content buys and is circling around to snap up the market by acquiring its way into consumers’ homes.

Disney has slowly amassed control of Hulu through buying out various stakeholders, but now that it shifts the platform’s weight, it’s pretty clear that it will use it as a selling point for its time-honed in-house content, which it is still expanding.

The streaming wars have been raging for years, but as the services seem to become more like what they’ve replaced, Disney seems poised to take control.

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on Twitter @lucasmtny or email
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On to the rest of the week’s news.

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Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context:

  • Apple Card rolls out
    Months after its public debut, Apple has begun rolling out its Apple Card credit card. We got our hands on the new Apple Card app, so check out more about what it’s like here.
  • Amid a struggling smartphone market, Samsung introduces new flagships
    The smartphone market is in a low-key free fall, but there’s not much for hardware makers to do than keep innovating. Samsung announced the release of two new phones for its Note series, with new features including a time-of-flight 3D scanning camera, a larger size and… no headphone jack. Read more here.
  • FedEx ties up ground contract with Amazon
    As Amazon rapidly attempts to build out its own air fleet to compete with FedEx’s planes, FedEx confirmed this week that it’s ending its ground-delivery contract with Amazon. Read more here.

GAFA Gaffes

How did the top tech companies screw up this week? This clearly needs its own section, in order of badness:

  1. Facebook could get fined billions more:
    [Facebook could face billions in potential damages as court rules facial recognition lawsuit can proceed]
  2. Instagram gets its own Cambridge Analytica:
    [Instagram ad partner secretly sucked up and tracked millions of users’ locations and stories]

Extra Crunch

Our premium subscription service had another week of interesting deep dives. My colleague Sarah Buhr had a few great conversations with VCs in the healthtech space and distilled some of their investment theses into a report.

Why is tech still aiming for the healthcare industry? It seems full of endless regulatory hurdles or stories of misguided founders with no knowledge of the space, running headlong into it, only to fall on their faces…

It’s easy to shake our fists at fool-hardy founders hoping to cash in on an industry that cannot rely on the old motto “move fast and break things.” But it doesn’t have to be the code tech lives or dies by.

So which startups have the mojo to keep at it and rise to the top? Venture capitalists often get to see a lot before deciding to invest. So we asked a few of our favorite health VC’s to share their insights.

Here are some of our other top reads this week for premium subscribers. This week, we talked about how to raise funding in August, a month not typically known for ease of access to VCs, and my colleague Ron dove into the MapR fire sale that took place this week:

We’re excited to ramp up The Station, a new gpgmail newsletter all about mobility. Each week, in addition to curating the biggest transportation news, Kirsten Korosec will provide analysis, original reporting and insider tips. Sign up here to get The Station in your inbox beginning this month.




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Most EU cookie ‘consent’ notices are meaningless or manipulative, study finds – gpgmail


New research into how European consumers interact with the cookie consent mechanisms which have proliferated since a major update to the bloc’s online privacy rules last year casts an unflattering light on widespread manipulation of a system that’s supposed to protect consumer rights.

As Europe’s General Data Protection Regulation (GDPR) came into force in May 2018, bringing in a tough new regime of fines for non-compliance, websites responded by popping up legal disclaimers which signpost visitor tracking activities. Some of these cookie notices even ask for consent to track you.

But many don’t — even now, more than a year later.

The study, which looked at how consumers interact with different designs of cookie pop-ups and how various design choices can nudge and influence people’s privacy choices, also suggests consumers are suffering a degree of confusion about how cookies function, as well as being generally mistrustful of the term ‘cookie’ itself. (With such baked in tricks, who can blame them?)

The researchers conclude that if consent to drop cookies was being collected in a way that’s compliant with the EU’s existing privacy laws only a tiny fraction of consumers would agree to be tracked.

The paper, which we’ve reviewed in draft ahead of publication, is co-authored by academics at Ruhr-University Bochum, Germany, and the University of Michigan in the US — and entitled: (Un)informed Consent: Studying GDPR Consent Notices in the Field.

The researchers ran a number of studies, gathering ~5,000 of cookie notices from screengrabs of leading websites to compile a snapshot (derived from a random sub-sample of 1,000) of the different cookie consent mechanisms in play in order to paint a picture of current implementations.

They also worked with a German ecommerce website over a period of four months to study how more than 82,000 unique visitors to the site interacted with various cookie consent designs which the researchers’ tweaked in order to explore how different defaults and design choices affected individuals’ privacy choices.

Their industry snapshot of cookie consent notices found that the majority are placed at the bottom of the screen (58%); not blocking the interaction with the website (93%); and offering no options other than a confirmation button that does not do anything (86%). So no choice at all then.

A majority also try to nudge users towards consenting (57%) — such as by using ‘dark pattern’ techniques like using a color to highlight the ‘agree’ button (which if clicked accepts privacy-unfriendly defaults) vs displaying a much less visible link to ‘more options’ so that pro-privacy choices are buried off screen.

And while they found that nearly all cookie notices (92%) contained a link to the site’s privacy policy, only a third (39%) mention the specific purpose of the data collection or who can access the data (21%).

The GDPR updated the EU’s long-standing digital privacy framework, with key additions including tightening the rules around consent as a legal basis for processing people’s data — which the regulation says must be specific (purpose limited), informed and freely given for consent to be valid.

Even so, since May last year there has been an outgrown in cookie ‘consent’ mechanisms popping up or sliding atop websites that still don’t offer EU visitors the necessary privacy choices, per the research.

“Given the legal requirements for explicit, informed consent, it is obvious that the vast majority of cookie consent notices are not compliant with European privacy law,” the researchers argue.

“Our results show that a reasonable amount of users are willing to engage with consent notices, especially those who want to opt out or do not want to opt in. Unfortunately, current implementations do not respect this and the large majority offers no meaningful choice.”

The researchers also record a large differential in interaction rates with consent notices — of between 5 and 55% — generated by tweaking positions, options, and presets on cookie notices.

This is where consent gets manipulated — to flip visitors’ preference for privacy.

They found that the more choices offered in a cookie notice, the more likely visitors were to decline the use of cookies. (Which is an interesting finding in light of the vendor laundry lists frequently baked into the so-called “transparency and consent framework” which the industry association, the Internet Advertising Bureau (IAB), has pushed as the standard for its members to use to gather GDPR consents.)

“The results show that nudges and pre-selection had a high impact on user decisions, confirming previous work,” the researchers write. “It also shows that the GDPR requirement of privacy by default should be enforced to make sure that consent notices collect explicit consent.”

Here’s a section from the paper discussing what they describe as “the strong impact of nudges and pre-selections”:

Overall the effect size between nudging (as a binary factor) and choice was CV=0.50. For example, in the rather simple case of notices that only asked users to confirm that they will be tracked, more users clicked the “Accept” button in the nudge condition, where it was highlighted (50.8% on mobile, 26.9% on desktop), than in the non-nudging condition where “Accept” was displayed as a text link (39.2% m, 21.1% d). The effect was most visible for the category-and vendor-based notices, where all checkboxes were pre-selected in the nudging condition, while they were not in the privacy-by-default version. On the one hand, the pre-selected versions led around 30% of mobile users and 10% of desktop users to accept all third parties. On the other hand, only a small fraction (< 0.1%) allowed all third parties when given the opt-in choice and around 1 to 4 percent allowed one or more third parties (labeled “other” in 4). None of the visitors with a desktop allowed all categories. Interestingly, the number of non-interacting users was highest on average for the vendor-based condition, although it took up the largest part of any screen since it offered six options to choose from.

The key implication is that just 0.1% of site visitors would freely choose to enable all cookie categories/vendors — i.e. when not being forced to do so by a lack of choice or via nudging with manipulative dark patterns (such as pre-selections).

Rising a fraction, to between 1-4%, who would enable some cookie categories in the same privacy-by-default scenario.

“Our results… indicate that the privacy-by-default and purposed-based consent requirements put forth by the GDPR would require websites to use consent notices that would actually lead to less than 0.1 % of active consent for the use of third parties,” they write in conclusion.

They do flag some limitations with the study, pointing out that the dataset they used that arrived at the 0.1% figure is biased — given the nationality of visitors is not generally representative of public Internet users, as well as the data being generated from a single retail site. But they supplemented their findings with data from a company (Cookiebot) which provides cookie notices as a SaaS — saying its data indicated a higher accept all clicks rate but still only marginally higher: Just 5.6%.

Hence the conclusion that if European web users were given an honest and genuine choice over whether or not they get tracked around the Internet, the overwhelming majority would choose to protect their privacy by rejecting tracking cookies.

This is an important finding because GDPR is unambiguous in stating that if an Internet service is relying on consent as a legal basis to process visitors’ personal data it must obtain consent before processing data (so before a tracking cookie is dropped) — and that consent must be specific, informed and freely given.

Yet, as the study confirms, it really doesn’t take much clicking around the regional Internet to find a gaslighting cookie notice that pops up with a mocking message saying by using this website you’re consenting to your data being processed how the site sees fit — with just a single ‘Ok’ button to affirm your lack of say in the matter.

It’s also all too common to see sites that nudge visitors towards a big brightly colored ‘click here’ button to accept data processing — squirrelling any opt outs into complex sub-menus that can sometimes require hundreds of individual clicks to deny consent per vendor.

You can even find websites that gate their content entirely unless or until a user clicks ‘accept’ — aka a cookie wall. (A practice that has recently attracted regulatory intervention.)

Nor can the current mess of cookie notices be blamed on a lack of specific guidance on what a valid and therefore legal cookie consent looks like. At least not any more. Here, for example, is a myth-busting blog which the UK’s Information Commissioner’s Office (ICO) published last month that’s pretty clear on what can and can’t be done with cookies.

For instance on cookie walls the ICO writes: “Using a blanket approach such as this is unlikely to represent valid consent. Statements such as ‘by continuing to use this website you are agreeing to cookies’ is not valid consent under the higher GDPR standard.” (The regulator goes into more detailed advice here.)

While France’s data watchdog, the CNIL, also published its own detailed guidance last month — if you prefer to digest cookie guidance in the language of love and diplomacy.

(Those of you reading gpgmail back in January 2018 may also remember this sage plain english advice from our GDPR explainer: “Consent requirements for processing personal data are also considerably strengthened under GDPR — meaning lengthy, inscrutable, pre-ticked T&Cs are likely to be unworkable.” So don’t say we didn’t warn you.)

Nor are Europe’s data protection watchdogs lacking in complaints about improper applications of ‘consent’ to justify processing people’s data.

Indeed, ‘forced consent’ was the substance of a series of linked complaints by the pro-privacy NGO noyb, which targeted T&Cs used by Facebook, WhatsApp, Instagram and Google Android immediately GDPR started being applied in May last year.

While not cookie notice specific, this set of complaints speaks to the same underlying principle — i.e. that EU users must be provided with a specific, informed and free choice when asked to consent to their data being processed. Otherwise the ‘consent’ isn’t valid.

So far Google is the only company to be hit with a penalty as a result of that first wave of consent-related GDPR complaints; France’s data watchdog issued it a $57M fine in January.

But the Irish DPC confirmed to us that three of the 11 open investigations it has into Facebook and its subsidiaries were opened after noyb’s consent-related complaints. (“Each of these investigations are at an advanced stage and we can’t comment any further as these investigations are ongoing,” a spokeswoman told us. So, er, watch that space.)

The problem, where EU cookie consent compliance is concerned, looks to be both a failure of enforcement and a lack of regulatory alignment — the latter as a consequence of the ePrivacy Directive (which most directly concerns cookies) still not being updated, generating confusion (if not outright conflict) with the shiny new GDPR.

However the ICO’s advice on cookies directly addresses claimed inconsistencies between ePrivacy and GDPR, stating plainly that Recital 25 of the former (which states: “Access to specific website content may be made conditional on the well-informed acceptance of a cookie or similar device, if it is used for a legitimate purpose”) does not, in fact, sanction gating your entire website behind an ‘accept or leave’ cookie wall.

Here’s what the ICO says on Recital 25 of the ePrivacy Directive:

  • ‘specific website content’ means that you should not make ‘general access’ subject to conditions requiring users to accept non-essential cookies – you can only limit certain content if the user does not consent;
  • the term ‘legitimate purpose’ refers to facilitating the provision of an information society service – ie, a service the user explicitly requests. This does not include third parties such as analytics services or online advertising;

So no cookie wall; and no partial walls that force a user to agree to ad targeting in order to access the content.

It’s worth point out that other types of privacy-friendly online advertising are available with which to monetize visits to a website. (And research suggests targeted ads offer only a tiny premium over non-targeted ads, even as publishers choosing a privacy-hostile ads path must now factor in the costs of data protection compliance to their calculations — as well as the cost and risk of massive GDPR fines if their security fails or they’re found to have violated the law.)

Negotiations to replace the now very long-in-the-tooth ePrivacy Directive — with an up-to-date ePrivacy Regulation which properly takes account of the proliferation of Internet messaging and all the ad tracking techs that have sprung up in the interim — are the subject of very intense lobbying, including from the adtech industry desperate to keep a hold of cookie data. But EU privacy law is clear.

“[Cookie consent]’s definitely broken (and has been for a while). But the GDPR is only partly to blame, it was not intended to fix this specific problem. The uncertainty of the current situation is caused the delay of the ePrivacy regulation that was put on hold (thanks to lobbying),” says Martin Degeling, one of the research paper’s co-authors, when we suggest European Internet users are being subject to a lot of ‘consent theatre’ (ie noisy yet non-compliant cookie notices) — which in turn is causing knock-on problems of consumer mistrust and consent fatigue for all these useless pop-ups. Which work against the core aims of the EU’s data protection framework.

“Consent fatigue and mistrust is definitely a problem,” he agrees. “Users that have experienced that clicking ‘decline’ will likely prevent them from using a site are likely to click ‘accept’ on any other site just because of one bad experience and regardless of what they actually want (which is in most cases: not be tracked).”

“We don’t have strong statistical evidence for that but users reported this in the survey,” he adds, citing a poll the researchers also ran asking site visitors about their privacy choices and general views on cookies. 

Degeling says he and his co-authors are in favor of a consent mechanism that would enable web users to specify their choice at a browser level — rather than the current mess and chaos of perpetual, confusing and often non-compliant per site pop-ups. Although he points out some caveats.

“DNT [Do Not Track] is probably also not GDPR compliant as it only knows one purpose. Nevertheless  something similar would be great,” he tells us. “But I’m not sure if shifting the responsibility to browser vendors to design an interface through which they can obtain consent will lead to the best results for users — the interfaces that we see now, e.g. with regard to cookies, are not a good solution either.

“And the conflict of interest for Google with Chrome are obvious.”

The EU’s unfortunate regulatory snafu around privacy — in that it now has one modernized, world-class privacy regulation butting up against an outdated directive (whose progress keeps being blocked by vested interests intent on being able to continue steamrollering consumer privacy) — likely goes some way to explaining why Member States’ data watchdogs have generally been loath, so far, to show their teeth where the specific issue of cookie consent is concerned.

At least for an initial period the hope among data protection agencies (DPAs) was likely that ePrivacy would be updated and so they should wait and see.

They have also undoubtedly been providing data processors with time to get their data houses and cookie consents in order. But the frictionless interregnum while GDPR was allowed to ‘bed in’ looks unlikely to last much longer.

Firstly because a law that’s not enforced isn’t worth the paper it’s written on (and EU fundamental rights are a lot older than the GDPR). Secondly, with the ePrivacy update still blocked DPAs have demonstrated they’re not just going to sit on their hands and watch privacy rights be rolled back — hence them putting out guidance that clarifies what GDPR means for cookies. They’re drawing lines in the sand, rather than waiting for ePrivacy to do it (which also guards against the latter being used by lobbyists as a vehicle to try to attack and water down GDPR).

And, thirdly, Europe’s political institutions and policymakers have been dining out on the geopolitical attention their shiny privacy framework (GDPR) has attained.

Much has been made at the highest levels in Europe of being able to point to US counterparts, caught on the hop by ongoing tech privacy and security scandals, while EU policymakers savor the schadenfreude of seeing their US counterparts being forced to ask publicly whether it’s time for America to have its own GDPR.

With its extraterritorial scope, GDPR was always intended to stamp Europe’s rule-making prowess on the global map. EU lawmakers will feel they can comfortably check that box.

However they are also aware the world is watching closely and critically — which makes enforcement a very key piece. It must slot in too. They need the GDPR to work on paper and be seen to be working in practice.

So the current cookie mess is a problematic signal which risks signposting regulatory failure — and that simply isn’t sustainable.

A spokesperson for the European Commission told us it cannot comment on specific research but said: “The protection of personal data is a fundamental right in the European Union and a topic the Juncker commission takes very seriously.”

“The GDPR strengthens the rights of individuals to be in control of the processing of personal data, it reinforces the transparency requirements in particular on the information that is crucial for the individual to make a choice, so that consent is given freely, specific and informed,” the spokesperson added. 

“Cookies, insofar as they are used to identify users, qualify as personal data and are therefore subject to the GDPR. Companies do have a right to process their users’ data as long as they receive consent or if they have a legitimate interest.”

All of which suggests that the movement, when it comes, must come from a reforming adtech industry.

With robust privacy regulation in place the writing is now on the wall for unfettered tracking of Internet users for the kind of high velocity, real-time trading of people’s eyeballs that the ad industry engineered for itself when no one knew what was being done with people’s data.

GDPR has already brought greater transparency. Once Europeans are no longer forced to trade away their privacy it’s clear they’ll vote with their clicks not to be ad-stalked around the Internet too.

The current chaos of non-compliant cookie notices is thus a signpost pointing at an underlying privacy lag — and likely also the last gasp signage of digital business models well past their sell-by-date.


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