How the Valley can get philanthropy right with former Hewlett Foundation president Paul Brest – gpgmail


Paul Brest didn’t set out to transform philanthropy. A constitutional law scholar who clerked for Supreme Court Justice John Harlan and is credited with coining the term “originalism,” Brest spent twelve years as dean of Stanford Law School.

But when he was named president of the William & Flora Hewlett Foundation, one of the country’s largest large non-profit funders, Brest applied the rigor of a legal scholar not just to his own institution’s practices but to those of the philanthropy field at large. He hired experts to study the practice of philanthropy and helped to launch Stanford’s Center for Philanthropy and Civil Society, where he still teaches.

Now, Brest has turned his attention to advising Silicon Valley’s next generation of donors.

From Stanford to the Hewlett Foundation

Photo by David Madison / Getty Images

Scott Bade: Your background is in constitutional law. How did you make the shift from being dean at Stanford to running the Hewlett Foundation as president?

Paul Brest: I came into the Hewlett Foundation largely by accident. I really didn’t know anything about philanthropy, but I had been teaching courses on problem-solving and decision making. I think I got the job because a number of people on the board knew me, both from Stanford Law School, but also from playing chamber music with Walter and Esther Hewlett.

Bade: When was this?

Brest: I started there in 2000. Bill Hewlett died the year after I came. Walter Hewlett, Bill’s son, was chair of the board during the entire time I was president. But it’s not a family foundation.

Bade: What were your initial impressions of the foundation and the broader philanthropic space?

Brest: Not having come from the non-profit sector, it took me a year or so to really understand what it [meant] to use our assets in each area in a strategic way.  The [Hewlett] Foundation had very good values in terms of the areas it was supporting — the environment, education, population, women’s reproductive rights. It had good philanthropic practices, but it was not very strategically focused. It turned out that not very many foundations were strategic.

Paul’s framework for thinking about philanthropy

Paul informal photo

Photo provided by Paul Brest

Bade: What do you mean by ‘strategic’?

Brest: What I mean [by] strategic is having clear goals and having an evidence-based, evidence-informed strategy for achieving them. Big foundations tend to be conglomerates with different programs trying to achieve different goals.

[Being strategic means] monitoring progress as you work towards those goals. Then evaluating in advance whether the strategy is going to be plausible and then whether you’re actually achieving the outcomes you’re trying to achieve so that you can make course corrections if you’re not achieving.

[For example,] the likelihood that the roughly billionaire dollars or more that have been spent or committed to climate advocacy are going to have any effect is quite low. The place where metrics comes in is just having kind of an expected return mindset where yes, the chances of success are low, but we know that the importance of success — or putting it differently, the effects of failure — are going to be catastrophic.

What a strategic mindset does here is say: it’s worth taking huge bets even where the margins of error of the likelihood of success are very hard to measure when the results are huge.

I don’t want to say the [Hewlett] Foundation was anti-strategic, or totally unstrategic, but it really had not developed a [this kind of] systematic framework for doing those things.

Bade: You’re known in the philanthropic community for putting an emphasis on defining, achieving, measuring impact. Have those sort of technocratic practices made philanthropy better?

Brest: I think you have to start by asking, what would it mean for philanthropy to be good? From my point of view, philanthropy is good when I like the goals it chooses. Then, given a good goal, when it is effective in achieving that goal. Strategy really has nothing to say about what the goals are, but only how effective it is.

My guess is that 90 plus percent of philanthropy is intended to achieve goals that most of us think are good goals. There are occasions when you have direct conflicts of goals as you do with say the anti-abortion and the choice movements, or gun control and the NRA. Those are important arguments.

But most philanthropy is trying to improve education or improve the lives of the poor. My view is that philanthropy is good when it is effective in achieving those goals, and trying to do no harm in the process.

Current debates on philanthropy


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Facebook really doesn’t want you to read these emails – gpgmail


Oh hey y’all, it’s Friday! It’s August! Which means it’s a great day for Facebook to drop a little news it would prefer you don’t notice. News that you won’t find a link to on the homepage of Facebook’s Newsroom — which is replete with colorfully illustrated items it does want you to read (like the puffed up claim that “Now You Can See and Control the Data That Apps and Websites Share With Facebook”.)

The blog post Facebook would really prefer you didn’t notice is tucked away in a News sub-section of this website — where it’s been confusingly entitled: Document Holds the Potential for Confusion. And has an unenticing grey image of a document icon to further put you off — just in case you happened to stumble on it after all. It’s almost as if Facebook is saying ‘definitely don’t click here‘…

So what is Facebook trying to bury in the horse latitudes of summer?

An internal email chain, starting September 2015, which shows a glimpse of what Facebook’s own staff knew about the activity of Cambridge Analytica prior to The Guardian‘s December 2015 scoop — when the newspaper broke the story that the controversial (and now defunct) data analytics firm, then working for Ted Cruz’s presidential campaign, had harvested data on millions of Facebook users without their knowledge and/or consent, and was using psychological insights gleaned from the data to target voters.

Facebook founder Mark Zuckerberg’s official timeline of events about what he knew when vis-a-via the Cambridge Analytica story has always been that his knowledge of the matter dates to December 2015 — when the Guardian published its story.

But the email thread Facebook is now releasing shows internal concerns being raised almost two months earlier.

This chimes with previous (more partial) releases of internal correspondence pertaining to Cambridge Analytica  — which have also come out as a result of legal actions (and which we’ve reported on previously here and here).

If you click to download the latest release, which Facebook suggests it ‘agreed’ with the District of Columbia Attorney General to “jointly make public”, you’ll find a redacted thread of emails in which Facebook staffers raise a number of platform policy violation concerns related to the “political partner space”, writing September 29, 2915, that “many companies seem to be on the edge- possibly over”.

Cambridge Analytica is first identified by name — when it’s described by a Facebook employee as “a sketchy (to say the least) data modelling company that has penetrated our market deeply” — on September 22, 2015, per this email thread. It is one of many companies the staffer writes are suspected of scraping user data — but is also described as “the largest and most aggressive on the conservative side”.

Screenshot 2019 08 23 at 16.34.15

On September 30, 2015, a Facebook staffer responds to this, asking for App IDs and app names for the apps engaging in scraping user data — before writing: “My hunch is that these apps’ data-scraping is likely non-compliant”.

“It would be very difficult to engage in data-scraping activity as you described while still being compliant with FPPs [Facebook Platform Policies],” this person adds.

Cambridge Analytica gets another direct mention (“the Cambridge app”) on the same day. A different Facebook staffer then chips in with a view that “it’s very likely these companies are not in violation of any of our terms” — before asking for “concrete examples” and warning against calling them to ask questions unless “red flags” have been confirmed.

On October 13, a Facebook employee chips back into the thread with the view that “there are likely a few data policy violations here”.

The email thread goes on to discuss concerns related to additional political partners and agencies using Facebook’s platform at that point, including ForAmerica, Creative Response Concepts, NationBuilder and Strategic Media 21. Which perhaps explains Facebook’s lack of focus on CA — if potentially “sketchy” political activity was apparently widespread.

On December 11 another Facebook staffer writes to ask for an expedited review of Cambridge Analytica — saying it’s “unfortunately… now a PR issue”, i.e. as a result of the Guardian publishing its article.

The same day a Facebook employee emails to say Cambridge Analytica “is hi pri at this point”, adding: “We need to sort this out ASAP” — a month and a half after the initial concern was raised.

Also on December 11 a staffer writes that they had not heard of GSR, the Cambridge-based developer CA hired to extract Facebook user data, before the Guardian article named it. But other Facebook staffers chip in to reveal personal knowledge of the psychographic profiling techniques deployed by Cambridge Analytica and GSR’s Dr Aleksandr Kogan, with one writing that Kogan was their postdoc supervisor at Cambridge University.

Another says they are friends with Michal Kosinsky, the lead author of a personality modelling paper that underpins the technique used by CA to try to manipulate voters — which they described as “solid science”.

A different staffer also flags the possibility that Facebook has worked with Kogan — ironically enough “on research on the Protect & Care team” — citing the “Wait, What thread” and another email, neither of which appear to have been released by Facebook in this ‘Exhibit 1’ bundle.

So we can only speculate on whether Facebook’s decision — around September 2015 — to hire Kogan’s GSR co-founder, Joseph Chancellor, appears as a discussion item in the ‘Wait, What’ thread…

Putting its own spin on the release of these internal emails in a blog post, Facebook sticks to its prior line that “unconfirmed reports of scraping” and “policy violations by Aleksandr Kogan” are two separate issues, writing:

We believe this document has the potential to confuse two different events surrounding our knowledge of Cambridge Analytica. There is no substantively new information in this document and the issues have been previously reported. As we have said many times, including last week to a British parliamentary committee, these are two distinct issues. One involved unconfirmed reports of scraping — accessing or collecting public data from our products using automated means — and the other involved policy violations by Aleksandr Kogan, an app developer who sold user data to Cambridge Analytica. This document proves the issues are separate; conflating them has the potential to mislead people.

It has previously also referred to the internal concerns raised about CA as “rumors”.

“Facebook was not aware that Kogan sold data to Cambridge Analytica until December 2015. That is a fact that we have testified to under oath, that we have described to our core regulators, and that we stand by today,” it adds now.

It also claims that after an engineer responded to concerns that CA was scraping data and looked into it they were not able to find any such evidence. “Even if such a report had been confirmed, such incidents would not naturally indicate the scale of the misconduct that Kogan had engaged in,” Facebook adds.

The company has sought to dismiss the privacy litigation brought against it by the District of Columbia which is related to the Cambridge Analytica scandal — but has been unsuccessful in derailing the case thus far.

The DC complaint alleges that Facebook allowed third-party developers to access consumers’ personal data, including information on their online behavior, in order to offer apps on its platform, and that it failed to effectively oversee and enforce its platform policies by not taking reasonable steps to protect consumer data and privacy. It also alleges Facebook failed to inform users of the CA breach.

Facebook has also failed to block another similar lawsuit that’s been filed in Washington, DC by Attorney General Karl Racine — which has alleged lax oversight and misleading privacy standards.


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Why are revenue-based VCs investing in so many women and underrepresented founders? – gpgmail


This guest post was written by David Teten, Venture Partner, HOF Capital. You can follow him at teten.com and @dteten. This is part of an ongoing series on revenue-based investing VC that will hit on:

A new wave of revenue-based investors are emerging who are using creative investing structures with some of the upside of traditional VC, but some of the downside protection of debt.

I’ve been a traditional equity VC for 8 years, and I’m researching new business models in venture capital. As I’ve learned about this model, I’ve been impressed by how these venture capitalists are accomplishing a major social impact goal… without even trying to.

Many are reporting that they’re seeing a more diverse pool of applicants than traditional equity VCs — even though virtually none have a particular focus on women or underrepresented founders. In addition, their portfolios look far more diverse than VC industry norms.

For context, revenue-based investing (“RBI”) is a new form of VC financing, distinct from the preferred equity structure most VCs use. RBI normally requires founders to pay back their investors with a fixed percentage of revenue until they have finished providing the investor with a fixed return on capital, which they agree upon in advance. For more background, see “Revenue-based investing: A new option for founders who care about control“.

I contacted every RBI venture capital investor I could identify, and learned:

  • John Borchers, Co-founder and Managing Partner of Decathlon Capital, reports that “37% of our portfolio companies would be considered ‘impact’ qualified companies. This includes companies that would meet most institutional definitions for impact investing (women, minority, and veteran owned/run businesses, including LMI (“Low to Moderate Income”) and CRA (“Community Reinvestment Act”) qualified companies. While we do lots of work in these areas due to the attractive opportunity set, we are not an impact investor, and impact qualification is not a criterion that we use in evaluating or funding companies. On an organic basis, 13% of our portfolio companies are women-owned or run businesses, while 19% of the companies we work with are minority-owned or run. When you look at the composition of the entire founding or executive teams, the number of companies with either a woman or minority in management jumps even higher and is north of 50%.”
  • Indie.VC reports, “…50% of the teams we’ve funded are led by female founders and nearly 20% are led by black founders.”
  • Lighter Capital reports that they’ve funded companies in 30 states, including well established startup hubs and less mature ecosystems.
  • According to Derek Manuge, CEO of Corl, in the past 12 months, 500+ companies have applied to Corl for funding. Of the ones who received capital, “30% were led by women, and 40% were led by executives of non-Caucasian or of mixed ethnic origin.”
  • Feenix Partners reports that “35% of our portfolio companies have either a female or minority (non-Caucasian) CEO or Owner.”
  • Michelle Romanow, co-founder and CEO of Clearbanc, says that “We have funded eight times more women than the venture capital industry average – probably because we’re not doing meetings, which is an amazing accomplishment, and that’s not because we do different sourcing or anything else. It was just because we looked at data.” (Note that Clearbanc has a somewhat different business model than the RBI VCs I list here.)
  • Founders First Capital is the only RBI VC I’ve identified with a specific focus on underrepresented founders. Kim Folsom, Co-Founder, reports that as of August 2019, Founders First’s portfolio was 80% women and 55% women of color; 70% people of color; 20% military veterans; and 71% located in low/moderate income areas. 85% of their companies have under $1m in annual revenues. I can also announce exclusively that according to Kim Folsom, “Founders First Capital Partner (F1stcp) has just secured a $100M credit facility commitment from a major institutional impact investor. This positions F1stcp to be the largest revenue-based investor platform addressing the funding gap for service-based, small businesses led by underserved and underrepresented founders.”

By contrast, according to PitchBook Data, since the beginning of 2016, companies with women founders have received only 4.4% of venture capital deals. Those companies have garnered only about 2% of all capital invested. This is despite the fact that the data says that in fact you’re better off investing in women.

Paul Graham href=”http://www.paulgraham.com/bias.html”> observes, “many suspect that venture capital firms are biased against female founders. This would be easy to detect: among their portfolio companies, do startups with female founders outperform those without?

A couple months ago, one VC firm (almost certainly unintentionally) published a study showing bias of this type. First Round Capital found that among its portfolio companies, startups with female founders outperformed those without by 63%.”

Image via Getty Images / runeer

Why are RBI investors investing disproportionately in women & underrepresented founders, and vice versa: why do these founders approach RBI investors? 

I’d argue it’s not that RBI is so unbiased and attractive; it’s that traditional equity VC is biased structurally against some women and underrepresented founders.

The Boston Consulting Group and MassChallenge, a US-based global network of accelerators, partnered to study why “women-owned startups are a better bet”. Through their analysis and interviews, BCG identified three primary reasons why female founders are less likely to receive VC funds.

The study used multivariate regression analysis to control for education levels and pitch quality to conclude that gender was a statistically significant factor. I argue that these 3 reasons are much less applicable for RBI investors than for conventional VCs.

  1. Less need for a belief in breakthrough technology. From the study: “More than men, women founders and their presentations are subject to challenges and pushback. For example, more women report being asked during their presentations to establish that they understand basic technical knowledge. And often, investors simply presume that the women founders don’t have that knowledge.” However, companies with a focus on early profitability are less likely to require an investor to believe in complex, hard-to-predict new technology which is hard to diligence. Instead, the company can pitch itself based on a credible financial projection.
  2. Realistic projections. “Male founders are more likely to make bold projections and assumptions in their pitches,” BCG observes, while, “Women, by contrast, are generally more conservative in their projections and may simply be asking for less than men.” However, to raise RBI a woman founder does not need to promise a valuation of $1 billion within 5 years. Rent the Runway co-founder and CEO Jennifer Hyman said in a recent interview with CNBC’s Julia Boorstin, “I haven’t been given the permission or privilege to lose a billion every quarter… I’ve had to bring my company towards profitability…”
  3. Concentration in consumer/branded products startups. BCG reports that, “Many male investors have little familiarity with the products and services that women-founded businesses market to other women”—especially in categories such as childcare or beauty. However, RBI investors report that they see a lot of proposals for ecommerce and consumer packaged goods geared to mothers. Meghan Cross Breeden, Cofounder of Amplifyher Ventures, observes, “Personal customer attachment shouldn’t be a factor in investing; the early investors in Snapchat and Facebook weren’t the Gen Z target demo. Rather, I would imagine that one explanation of women garnering rev-share modes of financing is the prevalence of women-led companies in the consumer/branded goods field, which systemically is more tangible and revenue driven. Therefore, there’s more revenue to share – as opposed to the typical venture business, which requires capital upfront before a J curve of growth.”

Traditional equity VCs are looking for high-risk, high-reward, “swing for the fences” models. The founders of such companies inherently are taking financial risk, reputational risk, and career risk.

Paul Graham, co-founder of Y Combinator, said, “few successful founders grew up desperately poor.” Ricky Yean, a serial founder, agrees: “building and sustaining a company that is “designed to grow fast” is especially hard if you grew up desperately poor”.

Most of the founders of the paradigmatic VC home runs were privileged: male, cisgender, well-educated, from affluent families, etc. Think Bill Gates and Mark Zuckerberg .

That privilege makes it easier for them to take very high risk. The average person, worried about students loans and long term employability, quite rationally is less likely to take the huge risk of founding a company. It’s far safer to just get a job.

Investors who back diverse teams can win much higher returns than the industry norm. Both RBI investors and the founders they back will hopefully benefit from this pattern.

For further reading

Note that none of the lawyers quoted or I are rendering legal advice in this article, and you should not rely on our counsel herein for your own decisions. I am not a lawyer. Thanks to the experts quoted for their thoughtful feedback.




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How ‘ghost work’ in Silicon Valley pressures the workforce, with Mary Gray – gpgmail


The phrase “pull yourself up by your own bootstraps” was originally meant sarcastically.

It’s not actually physically possible to do — especially while wearing Allbirds and having just fallen off a Bird scooter in downtown San Francisco, but I should get to my point.

This week, Ken Cuccinelli, the acting Director of the United States Citizenship and Immigrant Services Office, repeatedly referred to the notion of bootstraps in announcing shifts in immigration policy, even going so far as to change the words to Emma Lazarus’s famous poem “The New Colossus:” no longer “give me your tired, your poor, your huddled masses yearning to breathe free,” but “give me your tired and your poor who can stand on their own two feet, and who will not become a public charge.”

We’ve come to expect “alternative facts” from this administration, but who could have foreseen alternative poems?

Still, the concept of ‘bootstrapping’ is far from limited to the rhetorical territory of the welfare state and social safety net. It’s also a favorite term of art in Silicon Valley tech and venture capital circles: see for example this excellent (and scary) recent piece by my editor Danny Crichton, in which young VC firms attempt to overcome a lack of the startup capital that is essential to their business model by creating, as perhaps an even more essential feature of their model, impossible working conditions for most everyone involved. Often with predictably disastrous results.

It is in this context of unrealistic expectations about people’s labor, that I want to introduce my most recent interviewee in this series of in-depth conversations about ethics and technology.

Mary L. Gray is a Fellow at Harvard University’s Berkman Klein Center for Internet and Society and a Senior Researcher at Microsoft Research. One of the world’s leading experts in the emerging field of ethics in AI, Mary is also an anthropologist who maintains a faculty position at Indiana University. With her co-author Siddharth Suri (a computer scientist), Gray coined the term “ghost work,” as in the title of their extraordinarily important 2019 book, Ghost Work: How to Stop Silicon Valley from Building a New Global Underclass. 

Image via Mary L. Gray / Ghostwork / Adrianne Mathiowetz Photography

Ghost Work is a name for a rising new category of employment that involves people scheduling, managing, shipping, billing, etc. “through some combination of an application programming interface, APIs, the internet and maybe a sprinkle of artificial intelligence,” Gray told me earlier this summer. But what really distinguishes ghost work (and makes Mary’s scholarship around it so important) is the way it is presented and sold to the end consumer as artificial intelligence and the magic of computation.

In other words, just as we have long enjoyed telling ourselves that it’s possible to hoist ourselves up in life without help from anyone else (I like to think anyone who talks seriously about “bootstrapping” should be legally required to rephrase as “raising oneself from infancy”), we now attempt to convince ourselves and others that it’s possible, at scale, to get computers and robots to do work that only humans can actually do.

Ghost Work’s purpose, as I understand it, is to elevate the value of what the computers are doing (a minority of the work) and make us forget, as much as possible, about the actual messy human beings contributing to the services we use. Well, except for the founders, and maybe the occasional COO.

Facebook now has far more employees than Harvard has students, but many of us still talk about it as if it were little more than Mark Zuckerberg, Cheryl Sandberg, and a bunch of circuit boards.

But if working people are supposed to be ghosts, then when they speak up or otherwise make themselves visible, they are “haunting” us. And maybe it can be haunting to be reminded that you didn’t “bootstrap” yourself to billions or even to hundreds of thousands of dollars of net worth.

Sure, you worked hard. Sure, your circumstances may well have stunk. Most people’s do.

But none of us rise without help, without cooperation, without goodwill, both from those who look and think like us and those who do not. Not to mention dumb luck, even if only our incredible good fortune of being born with a relatively healthy mind and body, in a position to learn and grow, here on this planet, fourteen billion years or so after the Big Bang.

I’ll now turn to the conversation I recently had with Gray, which turned out to be surprisingly more hopeful than perhaps this introduction has made it seem.

Greg Epstein: One of the most central and least understood features of ghost work is the way it revolves around people constantly making themselves available to do it.

Mary Gray: Yes, [What Siddarth Suri and I call ghost work] values having a supply of people available, literally on demand. Their contributions are collective contributions.

It’s not one person you’re hiring to take you to the airport every day, or to confirm the identity of the driver, or to clean that data set. Unless we’re valuing that availability of a person, to participate in the moment of need, it can quickly slip into ghost work conditions.


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US legislator, David Cicilline, joins international push to interrogate platform power – gpgmail


US legislator David Cicilline will be joining the next meeting of the International Grand Committee on Disinformation and ‘Fake News’, it has been announced. The meeting will be held in Dublin on November 7.

Chair of the committee, the Irish Fine Gael politician Hildegarde Naughton, announced Cicilline’s inclusion today.

The congressman — who is chairman of the US House Judiciary Committee’s Antitrust, Commercial, and Administrative Law Subcommittee — will attend as an “ex officio member” which will allow him to question witnesses, she added.

Exactly who the witnesses in front of the grand committee will be is tbc. But the inclusion of a US legislator in the ranks of a non-US committee that’s been seeking answers about reining in online disinformation will certainly make any invitations that get extended to senior executives at US-based tech giants much harder to ignore.

Naughton points out that the addition of American legislators also means the International Grand Committee represents ~730 million citizens — and “their right to online privacy and security”.

“The Dublin meeting will be really significant in that it will be the first time that US legislators will participate,” she said in a statement. “As all the major social media/tech giants were founded and are headquartered in the United States it is very welcome that Congressman Cicilline has agreed to participate. His own Committee is presently conducting investigations into Facebook, Google, Amazon and Apple and so his attendance will greatly enhance our deliberations.”

“Greater regulation of social media and tech giants is fast becoming a priority for many countries throughout the world,” she added. “The International Grand Committee is a gathering of international parliamentarians who have a particular responsibility in this area. We will coordinate actions to tackle online election interference, ‘fake news’, and harmful online communications, amongst other issues while at the same time respecting freedom of speech.”

The international committee met for its first session in London last November — when it was forced to empty-chair Facebook founder Mark Zuckerberg who had declined to attend in person, sending UK policy VP Richard Allan in his stead.

Lawmakers from nine countries spent several hours taking Allan to task over Facebook’s lack of accountability for problems generated by the content it distributes and amplifies, raising myriad examples of ongoing failure to tackle the democracy-denting, society-damaging disinformation — from election interference to hate speech whipping up genocide.

A second meeting of the grand committee was held earlier this year in Canada — taking place over three days in May.

Again Zuckerberg failed to show. Facebook COO Sheryl Sandberg also gave international legislators zero facetime, with the company opting to send local head of policy, Kevin Chan, and global head of policy, Neil Potts, as stand ins.

Lawmakers were not amused. Canadian MPs voted to serve Zuckerberg and Sandberg with an open summons — meaning they’ll be required to appear before it the next time they step foot in the country.

Parliamentarians in the UK also issued a summons for Zuckerberg last year after repeat snubs to testify to the Digital, Culture, Media and Sport committee’s enquiry into fake news — a decision that essentially gave birth to the international grand committee, as legislators in multiple jurisdictions united around a common cause of trying to find ways to hold social media giants to accounts.

While it’s not clear who the grand committee will invite to the next session, Facebook’s founder seems highly unlikely to have dropped off their list. And this time Zuckerberg and Sandberg may find it harder to turn down an invite to Dublin, given the committee’s ranks will include a homegrown lawmaker.

In a statement on joining the next meeting, Cicilline said: “We are living in a critical moment for privacy rights and competition online, both in the United States and around the world.  As people become increasingly connected by what seem to be free technology platforms, many remain unaware of the costs they are actually paying.

“The Internet has also become concentrated, less open, and growingly hostile to innovation. This is a problem that transcends borders, and it requires multinational cooperation to craft solutions that foster competition and safeguard privacy online. I look forward to joining the International Grand Committee as part of its historic effort to identify problems in digital markets and chart a path forward that leads to a better online experience for everyone.”

Multiple tech giants (including Facebook) have their international headquarters in Ireland — making the committee’s choice of location for their next meeting a strategic one. Should any tech CEOs thus choose to snub an invite to testify to the committee they might find themselves being served with an open summons to testify by Irish parliamentarians — and not being able to set foot in a country where their international HQ is located would be more than a reputational irritant.

Ireland’s privacy regulator is also sitting on a stack of open investigations against tech giants — again with Facebook and Facebook owned companies producing the fattest file (some 11 investigations). But there are plenty of privacy and security concerns to go around, with the DPC’s current case file also touching tech giants including Apple, Google, LinkedIn and Twitter.


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Facebook denies making contradictory claims on Cambridge Analytica and other ‘sketchy’ apps – gpgmail


Facebook has denied contradicting itself in evidence to the UK parliament and a US public prosecutor.

Last month the Department for Digital, Culture, Media and Sport (DCMS) committee wrote to the company to raise what it said were discrepancies in evidence Facebook has given to international parliamentarians vs evidence submitted in response to the Washington, DC Attorney General — which is suing Facebook on its home turf, over the Cambridge Analytica data misuse scandal.

Yesterday Bloomberg obtained Facebook’s response to the committee.

In the letter Rebecca Stimson, the company’s head of U.K. public policy, denies any inconsistency in evidence submitted on both sides of the Atlantic, writing:

The evidence given to the Committees by Mike Schroepfer (Chief Technology Officer), Lord Allan (Vice President for Policy Solutions), and other Facebook representatives is entirely consistent with the allegations in the SEC 
Complaint filed 24 July 2019. In their evidence, Facebook representatives truthfully answered questions about when the company first learned of Aleksandr Kogan / GSR’s improper transfer of data to Cambridge Analytica, which was in 
December 2015 through The Guardian’s reporting. We are aware of no evidence to suggest that Facebook learned any earlier of that improper transfer.

 As we have told regulators, and many media stories have since reported, we heard speculation about data scraping by Cambridge Analytica in September 2015. We have also testified publicly that we first learned Kogan sold data to Cambridge Analytica in December 2015. These are two different things and this 
is not new information.

Stimson goes on to claim that Facebook merely heard “rumours in September 2015 that Cambridge Analytica was promoting its ability to scrape user data from public Facebook pages”. (In statements made earlier this year to the press on this same point Facebook has also used the word “speculation” to refer to the internal concerns raised by its staff, writing that “employees heard speculation that Cambridge Analytica was scraping data”.)

In the latest letter, Stimson repeats Facebook’s earlier line about data scraping being common for public pages (which may be true, but plenty of Facebook users’ pages aren’t public to anyone other than their hand-picked friends so… ), before claiming it’s not the same as the process by which Cambridge Analytica obtained Facebook data (i.e. by paying a developer on Facebook’s platform to build an app that harvested users’ and users friends’ data).

The scraping of data from public pages (which is unfortunately common for any internet service) is different from, and has no relationship to, the illicit transfer to third parties of data obtained by an app developer (which was the subject of the December 2015 Guardian article and of Facebook representatives’ evidence),” she writes, suggesting a ‘sketchy’ data modeling company with deep Facebook platform penetration looked like ‘business as usual’ for Facebook management back in 2015. 

As we’ve reported before, it has emerged this year — via submissions to other US legal proceedings against Facebook — that staff working for its political advertising division raised internal concerns about what Cambridge Analytica was up to in September 2015, months prior to The Guardian article which Facebook founder Mark Zuckerberg has claimed is the point when he personally learned what Cambridge Analytica was doing on his platform.

These Facebook staff described Cambridge Analytica as a “sketchy (to say the least) data modeling company that has penetrated our market deeply” — months before the newspaper published its scoop on the story, per an SEC complaint which netted Facebook a $100M fine, in addition to the FTC’s $5BN privacy penalty.

Nonetheless, Facebook is once claiming there’s nothing but ‘rumors’ to see here.

The DCMS committee also queried Facebook’s flat denial to the Washington, DC Attorney General that the company knew of any other apps misusing user data; failed to take proper measures to secure user data by failing to enforce its own platform policy; and failed to disclose to users when their data was misused — pointing out that Facebook reps told it on multiple occasions that Facebook knew of other apps violating its policies and had taken action against them.

Again, Facebook denies any contradiction whatsoever here.

“The particular allegation you cite asserts that Facebook knew of third party applications that violated its policies and failed to take reasonable measures to enforce against them,” writes Stimson. “As we have consistently stated to the Committee and elsewhere, we regularly take action against apps and developers who violate our policies. We therefore appropriately, and consistently with what we told the Committee, denied the allegation.”

So, turns out, Facebook was only flat denying some of the allegations in para 43 of the Washington, DC Attorney General’s complaint. But the company doesn’t see bundling responses to multiple allegations under one blanket denial as in any way misleading…

In a tweet responding to Facebook’s latest denial, DCMS committee chair Damian Collins dubbed the company’s response “typically disingenuous” — before pointing out: “They didn’t previously disclose to us concerns about Cambridge Analytica prior to Dec 2015, or say what they did about it & haven’t shared results of investigations into other Apps.”

On the app audit issue, Stimson’s letter justifies Facebook’s failure to provide the DCMS committee with the requested information on other ‘sketchy’ apps it’s investigating, writing this is because the investigation — which CEO Mark Zuckerberg announced in a Facebook blog post on March 21, 2018; saying then that it would “investigate all apps that had access to large amounts of information”; “conduct a full audit of any app with suspicious activity”; “ban any developer from our platform that does not agree to a thorough audit”; and ban any developers found to have misused user data; and “tell everyone affected by those apps” — is, er, “ongoing”.

More than a year ago Facebook did reveal that it had suspended around 200 suspicious apps out of “thousands” reviewed. However updates on Zuckerberg’s great app audit have been thin on the ground since then, to say the least.

“We will update the Committee as we publicly share additional information about that extensive effort,” says Stimson now.




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Facebook to admit ownership of Instagram, WhatsApp in barely visible small-print – gpgmail


For the first time in more than half a decade, Facebook wants to inform you that it owns Instagram, the hyper-popular rival social networking app it acquired for a $1BN steal back in 2012.

Ditto messaging platform WhatsApp — which Mark Zuckerberg splurged $19BN on a couple of years later to keep feeding eyeballs into his growth engine.

Facebook is adding its own brand name alongside the other two — in the following format: ‘Instagram from Facebook’; ‘WhatsApp from Facebook.’

The cheap perfume style rebranding was first reported by The Information which cites three people familiar with the matter who told it employees for the two apps were recently notified internally of the plan to rebrand.

“The move to add Facebook’s name to the apps has been met with surprise and confusion internally, reflecting the autonomy that the units have operated under,” it said. Although it also reported that CEO Mark Zuckerberg has also been frustrated that Facebook doesn’t get more credit for the growth of Instagram and WhatsApp.

So it sounds like Facebook may be hoping for a little reverse osmosis brand-washing — aka leveraging the popularity of its cleaner social apps to detoxify the scandal-hit mothership.

Not that Facebook is saying anything like that publicly, of course.

In a statement to The Information confirming the rebranding it explained it thus: “We want to be clearer about the products and services that are part of Facebook.”

The rebranding also comes at a time when Facebook is facing at least two antitrust investigations on its home turf — where calls for Facebook and other big tech giants to be broken up are now a regular feature of the campaign trail…

We can only surmise the legal advice Facebook must be receiving vis-a-vis what it should do to try to close down break up arguments that could deprive it of its pair of golden growth geese.

Arguments such as the fact most Instagram (and WhatsApp) users don’t even know they’re using a Facebook-owned app. Hence, as things stand, it would be pretty difficult for Facebook’s lawyers to successfully argue Instagram and WhatsApp users would be harmed if the apps were cut free by a break-up order.

But now — with the clumsy ‘from Facebook’ construction — Facebook can at least try to make a case that users are in a knowing relationship with Facebook in which they willingly, even if not lovingly, place their eyeballs in Zuckerberg’s bucket.

In which case Facebook is not telling you the Instagram user that it owns Instagram for your benefit. Not even slightly.

Note, for example, the use of the comparative adjective “clearer” in Facebook’s statement to explain its intent for the rebranding — rather than a simple statement: ‘we want to be clear’.

It’s definitely not saying it’s going to individually broadcast its ownership of Instagram and WhatsApp to each and every user on those networks. More like it’s going to try to creep the Facebook brand in. Which is far more in corporate character.

At the time of writing a five day old update of of Instagram’s iOS app already features the new construction — although it looks far more dark pattern than splashy rebrand, with just the faintest whisker of grey text at the base of the screen to disclose that you’re about to be sucked into the Facebook empire (vs a giant big blue ‘Create new account’ button winking to be tapped up top… )

Here’s the landing screen — with the new branding. Blink and you’ll miss it…

So not full disclosure then. More like just an easily overlooked dab of the legal stuff — to try to manage antitrust risk vs the risk of Facebook brand toxicity poisoning the (cleaner) wells of Instagram and WhatsApp.

There are signs the company is experimenting in some extremely dilute cross-brand-washing too.

The iOS app description for Instagram includes the new branding — tagged to an ad style slogan that gushes: “Bringing you closer to the people and things you love.”  But, frankly, who reads app descriptions?

image1

Up until pretty recently, both Instagram and WhatsApp had a degree of independence from their rapacious corporate parent — granted brand and operational independence under the original acquisition terms and leadership of their original founders.

Not any more, though. Instagram’s founders cleared out last year. While WhatsApp’s jumped ship between 2017 and 2018.

Zuckerberg lieutenants and/or long time Facebookers are now running both app businesses. The takeover is complete.

Facebook is also busy working on entangling the backends of its three networks — under a claimed ‘pivot to privacy‘ which it announced earlier this year.

This also appears intended to try to put regulators off by making breaking up Facebook much harder than it would be if you could just split it along existing app lines. Theories of user harm potentially get more complicated if you can demonstrate cross-platform chatter.

The accompanying 3,000+ word screed from Zuckerberg introduced the singular notion of “the Facebook network”; aka one pool for users to splash in, three differently colored slides to funnel you in there.

“In a few years, I expect future versions of Messenger and WhatsApp to become the main ways people communicate on the Facebook network,” he wrote. “If this evolution is successful, interacting with your friends and family across the Facebook network will become a fundamentally more private experience.”

The ‘from Facebook’ rebranding thus looks like just a little light covering fire for the really grand dodge Facebook is hoping to pull off as the break-up bullet speeds down the pipe: Aka Entangling its core businesses at the infrastructure level.

From three networks to one massive Facebook-owned user data pool. 

One network to rule them all, one network to find them,
One network to bring them all, and in the regulatory darkness bind them


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