Big data firm Palantir working with US on vaccine effort

SAN FRANCISCO - Big data company Palantir is working with US health officials on a project to track the production and distribution of future Covid-19 vaccines.

The project first reported by the Wall Street Journal and confirmed by AFP, would use data science to help manage the deployment of any vaccines.

Palantir, which has drawn fire for its police and homeland security projects and for one of its founders' close ties to President Donald Trump, did not comment on the report.

The Journal reported that the software system with the code name Tiberius could help identify high-priority populations at highest risk of infection but that the deal could draw fire by allowing the private company access to sensitive health information.

At least one pharmaceutical firm has indicated it will seek authorization for a vaccine in the US in November.

Palantir, which last month listed shares on the New York Stock Exchange, has defended its police and national security work in the face of critics who have said the company is enabling human rights violations.

Created after the September 11, 2001 attacks with initial funding from a CIA venture capital unit, Palantir and its predictive analytics platform has reportedly helped the US military locate Osama bin Laden and track weapons movements in the Middle East.

More recently it has worked with British health officials along with Google and Microsoft to track the progress of the Covid-19 outbreak, according to contracts released by the Open Democracy Project.

Agence France-Presse

America’s Top Foundations Bankroll Attack on Big Tech

WASHINGTON — Critics of big tech companies are eager to keep up their momentum — and some of the country’s wealthiest foundations are providing the financial firepower.

Major nonprofits, including the Ford and Hewlett Foundations, have pledged millions of dollars in total toward taking on the power of the country’s corporate giants like Facebook and Amazon. Other supporters include groups run by George Soros, the billionaire financier, and Pierre Omidyar, an eBay founder.

The foundations regularly fund critical looks at capitalism. The Ford Foundation, for example, supports many organizations that study and fight inequality. The Hewlett Foundation, whose lineage goes back to a founder of Hewlett-Packard and has a $10 billion endowment, has put a slice of its money toward organizations re-examining the free market economic policies that dominate Washington.

But the financial support is reaching new heights, and it could help the activists keep pressure on Silicon Valley by building the sort of political might that has powered liberal policy victories on issues like civil rights and net neutrality. Activists recently announced a coalition to take on Amazon, for example, that includes organizers around the country.

One of the groups receiving foundation money is led by Chris Hughes, a Facebook co-founder who now publicly argues for breaking up the social media giant. His group, the Economic Security Project, is pooling some of the money and then distributing it to projects focused on antitrust and concentration concerns. Hughes, wealthy from his time at Facebook, has contributed some of the money himself.

The Economic Security Project plans to give antitrust activists $10 million over the next 18 months. On Tuesday, the organization will announce how it plans to spend the first $3 million, putting the money toward grassroots organizers, researchers at several Washington think tanks and a group that recruits artists to make graphics that “expose how our economy really works.”

The coming years will test whether the efforts of the advocates can harness the skepticism about large corporations and the wealthy that is animating the Democratic presidential primary race. Federal and state officials have already announced investigations into Amazon, Facebook, Google and Apple. Ultimately, these advocates hope to address corporate concentration in numerous businesses, including drugs and farm products, and combat rising economic inequality.

They have their work cut out for them. Tech companies spend tens of millions of dollars on lobbying every year. And antitrust issues hinge on dense questions of law and economics that don’t fit on a bumper sticker.

“It’s not just about trends and corporate accountability,” said Maria Torres-Springer, vice president for US programs at the Ford Foundation, which has a $12 billion endowment. “It’s about creating and sustaining a movement that rebuilds political and economic power for everyday Americans.”

A leading beneficiary of the money is the Open Markets Institute, a research group whose focus on antitrust issues has been pivotal in making corporate concentration a matter of public debate. It expects to bring in more than $3 million in 2020, according to an internal document from the first half of this year. In 2016, before the group split off from a bigger organization, New America, its revenue topped out at just over $900,000.

This year, the Knight Foundation, which focuses on journalism, awarded Open Markets $2 million to study the impact that concentration among technology platforms has on the media. In September, the Ford Foundation gave it $200,000 to examine how tech monopolies affect workers. A public campaign it has led to break up Facebook will expand to include Google next year, according to Sarah Miller, the organization’s deputy director.

Hughes’ Economic Security Project is contributing to that campaign. It is also paying for Open Markets to conduct public opinion polling.

“Our view is you need an ecosystem,” Hughes said. “You need a community of people who generally share the same values but who, among themselves, may even have different approaches to the issues.”

Another progressive group, Jobs With Justice, plans to hold sessions next year explaining to people the antitrust case against tech companies in simple terms. In the draft script of the training, the session’s leader seizes on a simple metaphor, asking attendees to consider two lemonade stands.

The first stand belongs to someone whose family owns the local grocery store, so it gets its lemons free. The family’s neighbors, who opened a competing stand, aren’t so lucky. Over time, the first stand is able to slash its prices to undercut the second stand.

The session leader asks for a volunteer to play the person running the stand that can’t use a family connection to get free fruit. The volunteer has to decide whether to engage in a price war with the more powerful competitor while an organizer charts the volunteer’s dire financial situation on butcher paper.

Each situation ends with the volunteer’s lemonade stand closing and a revelation: Amazon, the session leader will tell participants, has used this tactic against its competitors.

“What we wanted to do was create some field materials, some training materials, just to even explain what a monopoly meant for people,” said Erica Smiley, Jobs With Justice’s executive director. “Outside of people maybe playing the board game, it’s kind of an old idea that maybe they learned in their fourth grade civics class but haven’t necessarily re-upped on.”

Smiley’s group is one participant in Athena, the new coalition organizing opposition to Amazon over antitrust, privacy and other concerns. The coalition says it wants to raise $15 million in its first 3 years.

Athena will receive money from Hughes’ fund, along with other groups trying to rally the grassroots to the cause.

Civil rights group Color of Change plans to use its funding from the project to pay for new hires to lead public campaigns around antitrust issues, while the Action Center on Race and the Economy will run “corporate campaigns designed to influence the public narrative on corporate concentration and win real victories for communities of color around the country.”

Other projects, like the artists’ group, are focused on finding new ways to explore the antitrust issue. Hughes’ group paid for a New York event in November — held by a project called the Museum of Capitalism — where people could play versions of the board game Monopoly that are meant to call out inequities in the economy.

Hughes will also finance some groups doing academic research on corporate concentration and intends to support more researchers in the future.

“If you’re going to see real change, you need a community of scholars who are in dialogue with one another,” he said.

Money is already flowing to campuses. In November, the Knight Foundation allocated $3.5 million to researchers to examine questions about digital platforms, including competition issues.

The foundation, along with Omidyar’s philanthropic network, has also provided the money to introduce an antitrust-focused initiative at Yale’s business school. In an interview, Sam Gill, a Knight executive, said the foundation had not yet taken a position on whether there should be an anti-monopoly movement but felt it was important to finance inquiries into the questions posed by major tech companies.

In recent years, more potential solutions to corporate concentration have emerged. While some believe in aggressive approaches like breaking up companies, others prefer new regulations or other measures.

At a conference at the University of Utah this fall, Dan Crane, a conservative law professor, challenged a group of participants including Tim Wu, a legal scholar and New York Times contributing opinion writer who is a leading voice calling for more aggressive antitrust enforcement. Crane pushed them to be more specific about the changes they would like to see in how antitrust laws are interpreted and enforced.

Over box lunches, the group wrote a statement, later published by Wu, listing legal precedents the group hopes will be overturned and policies it hopes will be enacted.

“Those who believe in a strong revival of antitrust, and a return to its anti-monopoly roots, have a duty to specify what, exactly, they mean, in concrete, legal detail,” the statement said.

Wu said that, among other purposes, the statement could be a test for judicial nominees. It’s a focus reminiscent of the playbook that helped build the conservative legal movement — which in turn shaped the antitrust laws Wu and his compatriots criticize today.

“Over a 30-year period, they won almost every one of those battles,” Wu said. “They just sort of said, ‘Here’s what it should be,’ and it happened.”


2019 The New York Times Company

source: news.abs-cbn.com

Google shifts rules for political ads, pressuring Facebook

WASHINGTON -- Google's tightening of its political ad policy could help reduce the spread of misinformation on election campaigns, but at a cost for lesser-known candidates.

The move by Google placing restrictions on how advertisers can target specific groups of voters also adds to the pressure on Facebook to modify its hands-off policy on political ads.

Google announced Wednesday it would not allow political advertisers to use "microtargeting" which can be based on user browsing data, political affiliation or other factors, for its ads, including on YouTube.

Instead it will limit targeting to general categories such as age, gender or postal code location. The changes will be enforced in Britain within a week and in the rest of the world starting in January.

Google also sought to clarify its policy by indicating it does not allow "false claims" in advertising, political or otherwise.

"There are no carve-outs," Google vice president Scott Spencer said.

"It's against our policies for any advertiser to make a false claim -- whether it's a claim about the price of a chair or a claim that you can vote by text message, that election day is postponed, or that a candidate has died."

The move follows a ban by Twitter on most kinds of political ads, and comes amid growing pressure on internet platforms to curb the spread of misinformation around political campaigns.

FACEBOOK ISOLATED

Senator Ron Wyden welcomed the Google move, saying it could reduce the number of deceptive ads which are sent to small segments of users, including from foreign entities.

"Targeted influence campaigns are more effective and more cost-effective than blanket propaganda, and far harder to identify and expose," Wyden said.

"Now that Google and Twitter have taken responsible steps to guard against shadowy political influence campaigns, Facebook should do the same."

Karen Kornbluh, director of the digital innovation democracy initiative at the German Marshall Fund, called Google's move "a critically important step in taking this political disinformation weapon off the table," but warned that the different rules for various platforms could lead to confusion.

Michelle Amazeen, a Boston University professor who follows political advertising, said Google's actions were "small steps in the right direction that serve to chip away at the tsunami of disinformation fostered by the current architecture of digital-social media platforms."

Analysts noted that Facebook, which has rejected efforts to fact-check political speech or ads, will be pressured to make a similar move that could have even more far-reaching consequences.

Facebook said in a tweet late Wednesday it was "looking at different ways we might refine our approach to political ads," without elaborating.

SHIFTING DIGITAL STRATEGIES

But political strategists from both parties warned that the changes by Google are likely to help well-financed and incumbent candidates and may not have the intended effect.

"This change won't curb disinformation, but it will hinder campaigns and others who are already working against the tide of bad actors to reach voters with facts," said Tara McGowan, founder of the progressive advocacy group ACRONYM which has launched a $75 million digital campaign.

Eric Wilson, a Republican digital strategist, said new candidates would be hampered in their ability to raise funds and build voter lists -- a key element on online campaigns even before the "persuasion" phase.

"The big disappointment on this is you're going to have campaign spending go to platforms that are less transparent that will allow you to target voters more narrowly. The dollars won't go away."

Mark Jablonowski, managing partner and chief technology officer of the digital consultancy DSPolitical, which works with Democrats, said Google's efforts create a patchwork of different rules that would favor incumbents.

"In the absence of sensible, implementable federal regulations, companies like Google have adopted misguided policies that will do little more than benefit incumbents, the wealthy, and those who rely on targeting largely monolithic Republican constituencies," he said.

President Donald Trump's campaign director Brad Parscale responded to the Google action by tweeting that "political elites & Big Tech want to rig elections.. Won't stop until they control all digital political speech."

source: news.abs-cbn.com

Apple Card faces probe over discrimination complaint

Something curious happened when a husband and wife recently compared their Apple Card spending limits.

David Heinemeier Hansson vented on Twitter that even though his spouse, Jamie Hansson, had a better credit score and other factors in her favor, her application for a credit line increase had been denied.

The prominent software developer wondered how his credit line could be 20 times higher, referring to Apple Card as a “sexist program” (with an expletive added for emphasis).

The card, a partnership between Apple and Goldman Sachs, made its debut in the United States in August.

“My wife and I filed joint tax returns, live in a community-property state, and have been married for a long time,” he wrote Thursday on Twitter. “Yet Apple’s black box algorithm thinks I deserve 20x the credit limit she does.”

Hansson’s tweets caught the attention of more than just his 350,000 followers.

They struck a nerve with New York state regulators, who announced Saturday that they would investigate the algorithm used by Apple Card to determine the creditworthiness of applicants.

Algorithms are codes or a set of instructions used by computers, search engines and smartphone applications to perform tasks, from ordering food delivery to hailing a ride — and yes, applying for credit.

The criteria used by the Apple Card are now being scrutinized by the New York State Department of Financial Services.

“Any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class violates New York law,” an agency spokeswoman said in a statement Saturday night.

“DFS is troubled to learn of potential discriminatory treatment in regards to credit limit decisions reportedly made by an algorithm of Apple Card, issued by Goldman Sachs, and the Department will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex,” the statement said.

An Apple spokeswoman directed questions to a Goldman Sachs spokesman, Andrew Williams, who said that the company could not comment publicly on individual customers.

“Our credit decisions are based on a customer’s creditworthiness and not on factors like gender, race, age, sexual orientation or any other basis prohibited by law,” Williams said.

David Hansson did not respond to an interview request Saturday night.

His wife’s experience with the Apple Card, the first credit card offering by Goldman Sachs, does not appear to be an isolated case, however.

Steve Wozniak, who invented the Apple-1 computer with Steve Jobs and was a founder of the tech giant, responded to Hansson’s tweet with a similar account.

“The same thing happened to us,” Wozniak wrote. “I got 10x the credit limit. We have no separate bank or credit card accounts or any separate assets. Hard to get to a human for a correction though. It’s big tech in 2019.”

In addition to Goldman Sachs, Apple partnered with Mastercard on the Apple Card, which the companies hailed as a revolutionary “digital first” credit card that had no numbers and could be added to the Wallet app on the iPhone and used with Apple Pay.

A spokesman for Mastercard, which provides support for Apple Card’s global payments network, did not respond to a request for comment Saturday.

David Hansson, a Danish entrepreneur and California resident, is known for creating Ruby on Rails, a popular computer coding language used to create database-backed web applications. He is an author and decorated race car driver on the Le Mans circuit, according to a biography on his website.

In a subsequent tweet, he said that the Apple Card’s customer service representatives told his wife that they were not authorized to discuss the credit assessment process.

He said that customer service employees were unable to explain why the algorithm had designated her to be less creditworthy but had assured his wife that the bank was not discriminating against women.

An applicant’s credit score and income level are used by Goldman Sachs to determine creditworthiness, according to a support page for the Apple Card. Past due accounts, a checking account closed by a bank for overdrafts, liens and medical debts can negatively affect applications, the page stated.

On Friday, a day after David Hansson started railing on the Apple Card’s treatment of female credit applicants, he said his wife got a “VIP bump” to match his credit limit. He said that didn’t make up for the flawed algorithm used by Apple Card.

He said many women had shared similar experiences with him on Twitter and urged regulators to contact them.

“My thread is full of accounts from women who’ve been declared to be worse credit risks than their husbands, despite higher credit scores or incomes,” he said.


2019 The New York Times Company

source: news.abs-cbn.com

Web giants' wield 'irresistible power,' whistleblower Snowden warns

LISBON -- Technology has given internet giants "irresistible power" when they work in concert with governments, Ed Snowden told the Web Summit that opened in Lisbon on Monday.

"When we see government and corporations working in concert... they become the left and right hands of the same body. What we see is the concentration of power," he told the European celebration of startups and new technologies gathering high-tech entrepreneurs and investors.

"If you create an irresistible power... how do you police the expression of that power when it is used against the public rather than for it?" he asked, speaking by video link from Russia where he has lived since 2013.

The US government last month urged tech giants to allow police to read encrypted messages, saying access was essential to prevent serious crime despite privacy concerns.

Snowden has just published a book that lays out his reasons for passing tens of thousands of secret documents to major news organisations in 2013.

The files were compiled while he worked for the US National Security Agency and revealed a dense network of communications and internet scrutiny by the NSA and partner agencies around the world.

Snowden recognized that public awareness is growing over the abuses he has denounced, and he lauded efforts to protect privacy, especially in Europe.

But he told the gathering of some 70,000: "The problem is not data protection, it's data collection" and the blind faith that internet users must have in the internet's masters.

'HYPER-POLITICAL'

The four-day summit is expected to focus on politics and tax issues, as well as new mobilities, medical applications, robotics and crypto currencies, organizers said.

"Tech has become hyper-political," said Paddy Cosgrave, the Irish founder and boss of Europe's biggest tech gathering.

"Increasingly, the front page of newspapers around the world are dominated by issues relating to technology," he told AFP.

Among the main events are discussions on the future of money, cars, medicine, housing, advertising, medias and humans' presence in outer space.

But what has emerged as the leading topic is how high tech has become a crucial factor in the Chinese-US trade war, the monetary power of sovereign governments and the radicalization of social media.

As sector giants continue to face calls for fair taxation or even dismantlement, regulators such as the EU Commission's vice president and competition chief, Margrethe Vestager, are expected to draw a crowd.

Vestager is to close the summit on Thursday, speaking just after Michael Kratsios, who is being sent from the White House to present the US viewpoint on internet taxation and regulation.

Vestager has spearheaded European efforts to get companies like Amazon, Apple, Facebook and Google to pay more in taxes in countries where they earn large amounts of their profits.

In addition to her post as EU competition chief, the Dane has also now been tasked with overseeing digital activities across the 28-member bloc.

Vestager "is incredibly popular... because she's trying to create a level playing field for innovators in particular in Europe," Cosgrave told AFP.

CAMBRIDGE ANALYTICA

At another event, former Cambridge Analytica executive Brittany Kaiser is expected to outline risks to personal data in the run-up to the 2020 US presidential election.

The now defunct data consultancy allegedly hijacked personal data on Facebook users ahead of the 2016 US vote. 

Huawei's rotating chairman Guo Ping is another headliner.

He is likely to call for support from the tech community after the Chinese phone giant was banned from the United States owing to suspicion its systems could be used to collect data for Beijing.

A scheduled address almost certain to raise the issue of internet taxation is by Pascal Saint-Amans, head of the OECD's Centre for Tax Policy and Administration.

The Organisation for Economic Co-operation and Development is drafting a "unified approach" to a digital tax on internet giants and multinational groups to be presented by June next year.

source: news.abs-cbn.com

Google wants safeguards for information in antitrust fight

SEATTLE — Google fired its opening salvo in what is expected to be a protracted antitrust fight with four dozen states, demanding more protections before it hands over confidential business documents sought by investigators.

In a petition filed Thursday in Texas state court of Travis County, Google, along with its parent company Alphabet, sought a protective order against Ken Paxton, the attorney general of Texas, who is spearheading the multistate antitrust investigation into the company.

The petition said Paxton had not provided sufficient safeguards for how his office shares Google’s sensitive business documents with outside consultants to the investigation. Google said some of those outside consultants were also working for competitors or complainants.

It is first legal challenge made by Google since the attorneys general from 48 states as well as the District of Columbia and Puerto Rico said in September that they were starting an antitrust investigation into the market power and corporate behavior of Google, with Paxton taking the lead.

On the same day it announced the investigation, Paxton’s office served Google with a civil investigative demand, seeking what the company called “highly proprietary, competitively sensitive, and otherwise confidential business information” including internal planning memos, strategic documents and white papers. Google has until Nov. 9 to start producing documents related to the 233 requests made by the office.

“Given the breadth of confidential business information sought by the (attorney general’s office) and the heightened risks of leaks and disclosure to Google’s competitors and complainants in this and other regulatory proceedings, a protective order is appropriate and necessary,” Google wrote.

Google’s petition is largely a procedural move, but it offers insight both into who is helping the attorneys general and what Google is worried about as it enters what could be a long legal tussle. In addition to the state inquiries, House and Senate committees, the Justice Department and the Federal Trade Commission are also looking into the company’s business practices.

In a statement, the Texas attorney general’s office said it was caught off-guard by Google’s petition “challenging our right to employ many of the most knowledgeable in this complex field.” It said it had been working with Google to discuss “appropriate confidentiality provisions” to ensure that the information would not be used by the company’s competitors, but what Google wanted would compromise the investigation.

“Google’s petition is nothing more than an effort to hamstring the investigation. But Google is not entitled to choose the states’ expert or run the states’ investigation,” Marc Rylander, communications director for Paxton, said in a statement.

Google said it wanted to be notified in advance before the attorney general’s office shared its confidential company information with third parties such as consultants and sought limits on the ability of outside consultants with access to those documents from working with Google’s competitors.

Google also asked for a “cooling-off” period to prevent consultants from jumping into another job advising competitors based on what it learned during the course of the investigation.

Google pointed to the background of two of the three consultants to the investigation as particularly worrisome. One had served as a consultant to companies that have been vocal in their criticism of Google, including News Corp. and the Russian search engine Yandex. The other, a former lawyer for Microsoft, had also represented clients in other antitrust and other cases against Google.

“This is an extraordinarily irregular arrangement and it’s only fair to have assurances that our confidential business information won’t be shared with competitors or vocal complainants,” said Jose Castaneda, a Google spokesman.

It is not unusual for government investigations to coordinate antitrust arguments with competitors of the company it is investigating. This also happened in the monopoly case against Microsoft in the 1990s.

“This looks like a sideshow,” said David Segal, executive director at Demand Progress, an activist group focused on issues of corporate power and internet freedom. He called Google’s actions “standard delay and deflect tactics by which one of the most powerful corporations in the history of the world” was trying to avoid scrutiny.


2019 The New York Times Company

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China’s Big Brother targets business

BEIJING — China is funnelling vast amounts of public and private data into huge databases aimed at tightening its control over its nearly 1.4 billion people.

But the business world has become its biggest target.

Beijing is increasingly amassing information now divided among various government agencies and industry associations — including court decisions, payroll data, environmental records, copyright violations, even how many employees are members of the Communist Party — and using it to grade businesses and the people who run them, according to state media, government documents and experts.

Companies that get low grades can be banned from borrowing money or doing other essential tasks. Their owners or executives could have their bank accounts frozen or be forbidden from traveling.

It isn’t just aimed at Chinese businesses. In letters sent to the companies, officials have threatened to give United Airlines, American Airlines and Delta Air Lines black marks on their records if they don’t bend to Beijing’s wishes. FedEx could face a similar punishment.

China calls it the social credit system. By next year, Chinese leaders had hoped to start an ambitious nationwide program focused on punishing or rewarding individuals. It was aimed at replicating the credit scoring system common in the United States and other places, as well as taming behavior in a country where laws are inconsistently enforced.

Civil libertarians warned that it would create a digital Big Brother that would intrude into everyday Chinese life. But the system has yet to materialize for individuals on a mass scale.

For many businesses, however, social credit has become a fact of life. In September, China’s central economic planning agency announced that it had completed a first evaluation of 33 million businesses, giving them ratings from 1 for excellent to 4 for poor. China hopes it will someday become a nationwide regulatory tool, harnessing the country’s growing skills in big data and automation, to help the Communist Party keep the business world in line.

“It’s supposed to affect the decision-making of businesses to conform to what the party wants,” said Samantha Hoffman, a fellow at the Australian Strategic Policy Institute, a think tank.

Loren Fei, the 30-year-old-daughter of a silk factory owner, has been added to a blacklist of businesses and their owners. Because her father couldn’t pay his bills, she said, her bank accounts have been frozen and she lost her job and her ability to travel.

“My family really wants to pay back the money, and the system is making it impossible,” Fei said.

Authorities are testing the system as a tool to bend foreign companies to the Communist Party’s political views.

United, Delta and American received letters last year from Chinese aviation officials saying their social credit score could be hit unless their websites labeled Macao, Hong Kong and Taiwan as part of China. Lower scores would lead to investigations, the possibility of frozen bank accounts, limitations on local employees’ movement and other punishments, according to a letter sent to United and seen by The New York Times.

Representatives of United, Delta and American Airlines confirmed changing their websites but declined to comment specifically on the matter.

Social credit is one aspect of the Communist Party’s efforts under Xi Jinping, its top leader, to strengthen its hold over the country. Authorities are installing separate facial-recognition technology and other monitoring systems to quell dissent as well as stop crime. They have taken a tougher line on media and worked to give the party a greater role in offices and classrooms.

Applied to businesses, the social credit system could bring real benefits to China. Despite Beijing’s authoritarian grip on power, it has long struggled to get businesses to follow the law. Competing, inefficient government ministries hinder enforcement. Local governments shelter powerful businesses. The result has been widespread pollution, rampant violations of labor laws and other problems.

For instance, Fei said that for years her family’s silk factory had been given dispensation to break environmental rules by local government authorities eager for economic growth. It was finally shut down for environmental reasons.

But companies have little recourse if the data is inaccurate or punishments disproportionately disruptive, experts said.

“The unified rewards and punishment system significantly increases the potential for one violation to snowball across your operations until you have this avalanche of penalties that make it impossible to operate until you solve that one thing,” said Kendra Schaefer, head of digital research at Trivium China, a consulting firm that recently published a report on social credit.

Foreign companies have expressed concern about how they could be affected by their business partners. The German chemical company BASF, for example, is responsible for ensuring that its Chinese partners stay environmentally compliant.

“They put pressure on us in the supply chain to sort out the environmental challenges,” said Jörg Wuttke, president of the European Union Chamber of Commerce in China, who is also the chief representative of BASF in China. “That’s a definite shift that puts a lot of pressure on us.”

Foreign businesses also worry that social credit could become a weapon in the trade war between China and the United States. In a report last month, the European Union Chamber of Commerce cited the example of FedEx, the US package carrier, which has been caught in the middle of the trade fight. The Chinese government has threatened to place FedEx on a list of foreign companies and people it considers unreliable, alleging that it broke the law by withholding the shipment of Huawei products. The language used was similar to social credit.

Chinese officials have not released the list or said what it would do, but they have said they will treat all companies equally.

China began to detail its ambitions for the social credit system 6 years ago, saying it could be a reality by 2020. While some critics saw it as a form of total social control, it was primarily envisioned as a tool for a country where people often break the law in big and little ways without consequences. Chinese authorities typically exert social control through police, who are setting up separate, more draconian systems that include biometric data, like face scans and DNA records.

In any case, social credit has proved difficult to use on individuals. China’s central bank canceled plans to include data from popular electronic payment systems run by Alibaba and Tencent, two Chinese internet giants. Pilot programs have been started in only a few places.

Even there, the programs have had little impact. During a visit to Rongcheng, a social credit pilot city in eastern China, officials said that a good score would get you a speedier check-in at the hospital and easier access to loans. But hospital workers and teachers said social credit had not affected how they do their jobs. Many residents said they were unaware it existed.

“I might have heard about it somewhere but I think it’s none of my business and not relevant to our lives in the village,” said Liang Xiaoli, a store owner. Besides, she added, “I don’t really care. I mean, why should I?”

Residents were rewarded based on factors like whether they helped to keep the city clean. Officials with clipboards collected data and handed out self-assessment forms. They posted photos of citizens with top scores on bulletin boards. In many cases the standouts were related to local Communist Party leaders. Liang Huaying, a Rongcheng official, said they got points because they most often showed up at official events.

The system has proved more adaptable to ensuring good conduct for business.

The social credit system brings together various blacklists long run by different ministries and local governments, allowing authorities to broadly and consistently punish wrongdoers. But while China is assembling a nationwide social credit system, it still has dozens of city-level systems that use different scoring methods.

Fei, the daughter of the silk factory owner, found out she was in the system during a work trip in late 2017, when she could not buy a train ticket home. Then her bank accounts were frozen. She was eventually fired from her job as a financial analyst.

Fei had signed for a loan on her father’s behalf. Fei’s mother, who is retired, is also on the blacklist because she is a shareholder. Her monthly pension payments have been frozen. The family is in debt for hundreds of thousands of dollars. Fei, who now sells goods on the internet, said she makes one-tenth of what she did before.

She found a community of people online with situations like hers. One man told her he used to be a civil servant until he was forced to quit his job after being blacklisted.

Fei said this was unfair. “No one wants to be a dishonest person,” she said.


2019 The New York Times Company

source: news.abs-cbn.com

Personal data at the center of fight vs Facebook, Google

LONDON -- Germany’s top antitrust enforcer, Andreas Mundt, recently asked a room full of lawyers, academics and regulators to imagine a wall filled with their personal information collected by Facebook and Google. He told them to picture it stocked with their data broken up into categories like finances, location, relationships and hobbies.

“That is you,” Mundt said. “And I promise you this wall knows you better than your wife.”

Few listened to Mundt when, a few years ago, he began raising alarms about the data collected by the tech giants. While online services like Facebook and Google did not charge a dime, people paid a high price by giving the companies so many personal details, he argued. And the people had no choice, because the companies had no real competitors.

But in February, his agency ruled that Facebook had broken the country’s law and demanded that the company stop automatically sharing data among the services it owns, like Instagram and WhatsApp, or websites that use its “like” and “share” buttons. It was the first such ruling in Europe, putting in practice ideas that had never fully escaped academic and think tank debates.

As US regulators and lawmakers intensify their scrutiny of Big Tech, there is a lot of discussion about whether or how they could accuse the companies of violating antitrust law. Often, regulators look to whether a company is causing consumer harm — a standard that can be hard to prove when a service is free.

The response from Mundt is simple. The only way to take on Facebook and some of its peers is to attack what they value most: data.

He argues that the companies are so dominant in their core businesses that consumers, if they want to search the internet or be on social media, have no choice but to share their personal data. The data then strengthens the tech companies’ position over rivals even more — and therefore is anticompetitive, Mundt says.

The companies have strongly fought against his argument. But it is gaining traction in antitrust circles, as Mundt, who has led Germany’s antitrust agency for almost a decade, urges officials in other nations to make the same point.

After the Facebook ruling, Mundt received calls from regulators and lawyers around the world to discuss the idea. He helped organize a meeting of fellow antitrust officials in Colombia, where they spent four days discussing tech regulation. Joseph Simons, chairman of the Federal Trade Commission, and Makan Delrahim, head of the Justice Department antitrust division, were among those attending.

“The German authority is way out in front here and in a real sense the leading antitrust authority in the world with respect to these technology issues,” said Thomas Vinje, partner at the Clifford Chance law firm in Brussels and a veteran of tech industry antitrust battles involving Microsoft and Google.

Other regulators are looking to build on Germany’s approach. The European Commission is in the early stages of an investigation into Facebook, including its use of data, said a person familiar with the inquiry who spoke on the condition of anonymity.

Online platforms constantly collect data on users: what is clicked on, how fast a person scrolls past a post, what video a person stops to watch. The information helps a company like Facebook infer characteristics about interests, personal connections and financial demographics to better target advertising, or train machine-learning algorithms that can be used for future products.

It is an extraordinarily lucrative business model. Facebook made $55 billion from advertising last year, while Google’s ad sales totaled $116 billion.

What’s distressing to regulators is the lack of new competitors, a trend Mundt attributes to a company’s access to data and plentiful financial resources. He says Facebook controls more than 95 percent of the social networking market in Germany. Without competition, the social network unfairly forces people to make an all-or-nothing choice between agreeing to unlimited data collection or not using Facebook at all.

When investigating Facebook, German regulators built a map of the information the company collects. It looked similar to the one Mundt described during his recent speech — a web of personal information that branched into details about homeownership, life events, politics and buying behavior.

Mundt contends that Facebook and other tech giants don’t need to be broken up, as Sen. Elizabeth Warren and others have suggested. Instead, he thinks governments should limit their ability to collect data. The approach can have an effect similar to a breakup by isolating a company’s different services.

“The business model is to gather and process data, full stop. There is nothing else,” Mundt said in an interview. “If they don’t have data, they can have 10,000 very intelligent engineers who tell you what you can make out of data, but without the data you don’t make anything.”

Germany is at the forefront of a deeper realization among regulators and policymakers globally that laws must evolve to keep pace with technological change. Rules that regulate industries like oil or transportation, where dominance is measured in physical goods and price gouging, don’t as easily apply to services that are digital, are often free and rely on people’s attention and data more than infrastructure.

Europe has regularly used antitrust law to take on the tech industry. The European Commission has punished Amazon, Apple, Google and Qualcomm in recent years for unfair competition. And more actions are expected in the years ahead. An investigation into Amazon’s use of data was started last year. Margrethe Vestager, the EU’s top antitrust regulator, has said data must play a more central role in assessing market dominance in the digital economy, particularly when reviewing acquisitions by tech companies.

“Antitrust law will become irrelevant in the digital marketplace if it doesn’t adopt to understanding the power of data in analyzing market power and dominance,” said Gene Kimmelman, former chief counsel of the Justice Department antitrust division who is now president of Public Knowledge, a public interest advocacy group that favors stronger oversight of tech platforms.

Critics say Germany’s aggressive approach stretches the limits of antitrust law and won’t stand up to court reviews. Mundt’s focus on data is seen by some as overly simplistic and, if adopted widely, will make it harder to offer free services. Because data is shared widely among different businesses and industries, critics say, the attempts to limit its flow will cause unintended consequences and disruptions.

“European regulators are using competition policy to pursue objectives that are unrelated to competition,” said Eline Chivot, a senior policy analyst in Brussels for the Center for Data Innovation, a group funded by a Washington think tank whose board includes representatives from Amazon, Apple and Microsoft. “It introduces uncertainty.”

Facebook is appealing the German decision, arguing that it was transparent with users about how data is collected. The social network argues that its use of data helps improve the service and that German regulators singled it out for practices common across the internet.

Even those who support Germany’s broader goals question whether its approach will be effective. The February ruling allows Facebook to continue sharing data between Instagram and WhatsApp if it gets users to click a new permission box. Many wonder how effective the ruling will be because most people will sign off without much thought.

“It might be that you’ll end up in the same place you started,” said Jason Furman, a senior economic adviser in the Obama administration.

Furman, a Harvard professor advising the British government on tech regulation, said that rather than relying on antitrust law alone, countries should create a dedicated regulator for the tech industry, to match those covering the banking, health and transportation sectors of the economy. He said a watchdog with expertise in the field could better review a company’s behavior and use of data on a case-by-case basis. He said new laws requiring companies to make some of their data available to rivals also could seed competition.

In the United States, where antitrust law has a narrower scope than in Europe, experts say Germany’s approach won’t work because it relies on privacy and consumer protection rules that don’t exist in America. But lawmakers and federal regulators in Washington are studying new ways to account for data in regulating the digital economy.

Delrahim, the head of the Justice Department antitrust division, said in a speech last month that lack of competition may be leading to weaker online privacy protections. “Diminished quality is also a type of harm to competition,” he said.

Mundt says Germany’s approach is not a final answer, but he hopes it inspires bolder action by regulators, who he says must push legal boundaries just as the companies have done.

“We need innovative cases,” he said. “What we have done with Facebook can’t be found in a textbook.”

source: news.abs-cbn.com