Catalan separatists have tooled up with a decentralized app for civil disobedience

Is our age of ubiquitous smartphones and social media turning into an era of mass civil unrest? Two years after holding an independence referendum and unilaterally declaring independence in defiance of the Spanish state — then failing to gain recognition for la república and being forced to watch political leaders jailed or exiled — Catalonia’s secessionist movement has resurfaced with a major splash.

One of the first protest actions programmed by a new online activist group, calling itself Tsunami Democràtic, saw thousands of protestors coalescing on Barcelona airport Monday, in an attempt to shut it down. The protest didn’t quite do that but it did lead to major disruption, with roads blocked by human traffic as protestors walked down the highway and the cancelation of more than 100 flights, plus hours of delays for travellers arriving into El Prat.

For months leading up to a major Supreme Court verdict on the fate of imprisoned Catalan political leaders a ‘technical elite‘ — as one local political science academic described them this week — has been preparing to reboot Catalonia’s independence movement by developing bespoke, decentralized high-tech protest tools.

A source with knowledge of Tsunami Democràtic, speaking to TechCrunch on condition of anonymity, told us that “high level developers” located all around the world are involved in the effort, divvying up coding tasks as per any large scale IT project and leveraging open source resources (such as the RetroShare node-based networking platform) to channel grassroots support for independence into a resilient campaign network that can’t be stopped by the arrest of a few leaders.

Demonstrators at the airport on Monday were responding directly to a call to blockade the main terminal posted to the group’s Telegram channel.

Additional waves of protest are being planned and programmed via a bespoke Tsunami Democràtic app that was also released this week for Android smartphones — as a sideload, not yet a Google Play download.

The app is intended to supplement mainstream social network platform broadcasts by mobilizing smaller, localized groups of supporters to carry out peaceful acts of civil disobedience all over Catalonia.

Our source walked us through the app, which requires location permission to function in order that administrators can map available human resources to co-ordinate protests. We’re told a user’s precise location is not shared but rather that an obfuscated, more fuzzy location marker gets sent. However the app’s source code has not yet been open sourced so users have to take such claims on trust (open sourcing is said to be the plan — but only once the app has been scrubbed of any identifying traces, per the source).

The app requires a QR code to be activated. This is a security measure intended to manage activation in stages, via trusted circles of acquaintances, to limit the risk of infiltration by state authorities. Though it feels a bit like a viral gamification tactic to encourage people to spread the word and generate publicity organically by asking their friends if they have a code or not.

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Whatever it’s really for the chatter seems to be working. During our meeting over coffee we overheard a group of people sitting at another table talking about the app. And at the time of writing Tsunami Democràtic has announced 15,000 successful QR code activations so far. Though it’s not clear how successful the intended flashmob civil disobedience game-plan will be at this nascent stage.

Once activated, app users are asked to specify their availability (i.e. days and times of day) for carrying out civil disobedience actions. And to specify if they own certain mobility resources which could be utilized as part of a protest (e.g. car, scooter, bike, tractor).

Examples of potential actions described to us by our source were go-slows to bring traffic grinding to a halt and faux shopping sprees targeting supermarkets where activists could spend a few hours piling carts high with goods before leaving them abandoned in the store for someone else to clean up.

One actual early action carried out by activists from the group last month targeted a branch of the local CaixaBank with a masked protestor sit-in.

Our source said the intention is to include a pop-up in the app as a sort of contract of conscience which asks users to confirm participation in the organized chaos will be entirely peaceful. Here’s an example of what the comprometo looks like:

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Users are also asked to confirm both their intention to participate in a forthcoming action (meaning the app will capture attendance numbers for protests ahead of time) and to check in when they get there so its administrators can track actual participation in real-time.

The app doesn’t ask for any personal data during onboarding — there’s no account creation etc — although users are agreeing to their location being pervasively tracked.

And it’s at least possible that other personal data could be passed via, for example, a comment submission field that lets people send feedback on actions. Or if the app ends up recording other data via access to smartphone sensors.

The other key point is that users only see actions related to their stated availability and tracked location. So, from a protestor’s point of view, they see only a tiny piece of the Tsunami Democràtic protest program. The user view is decentralized and information is distributed strictly piecemeal, on a need to know basis.

Behind the scenes — where unknown administrators are accessing its data and devising and managing protest actions to distribute via the app — there may be an entirely centralized view of available human protest resources. But it’s not clear what the other side of the platform looks like. Our source was unable to show it to us or articulate what it looks like.

Certainly, administrators are in a position to cancel planned actions if, for example, there’s not enough participation — meaning they can invisibly manage external optics around engagement with the cause. Not enough foot soldiers for a planned protest? Just call it off quietly via the app.

Also not at all clear: Who the driving forces are behind the Tsunami Democràtic protest mask?

“There is no thinking brain, there are many brains,” a spokesman for the movement told the El Diario newspaper this week. But that does raise pretty major questions about democratic legitimacy. Because, well, if you’re claiming to be fighting for democracy by mobilizing popular support, and you’re doing it from inside a Western democracy, can you really claim that while your organization remains in the shadows?

Even if your aim is non-violent political protest, and your hierarchy is genuinely decentralized, which is the suggestive claim here, unless you’re offering transparency of structure so as to make your movement’s composition and administration visible to outside scrutiny (so that your claims of democratic legitimacy can be independently verified) then individual protestors (the app’s end users) just have to take your word for it.

End users who are being crowdsourced and coopted to act out via app instruction as if they’re pawns on a high tech chess board. They are also being asked (implicitly) to shoulder direct personal risk in order that a faceless movement generates bottom up political pressure.

So there’s a troubling contradiction here for a movement that has chosen to include the word ‘democractic’ in its name. (The brand is a reference to a phase used by jailed Catalan cultural leader, Jordi Cuixart.) Who or what is powering this wave?

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We also now know all too well how the double-sided nature of platforms means these fast-flowing technosocial channels can easily be misappropriated by motivated interest groups to gamify and manipulate opinion (and even action) en masse. This has been made amply clear in recent years with political disinformation campaigns mushrooming into view all over the online place.

So while emoji-strewn political protest messages calling for people to mobilize at a particular street corner might seem a bit of harmless ‘Pokemon Go’-style urban fun, the upshot can — and this week has — been far less predictable and riskier than its gamified packaging might suggest.

Plenty of protests have gone off peacefully, certainly. Others — often those going on after dusk and late into the night — have devolved into ugly scenes and destructive clashes.

There is clearly a huge challenge for decentralized movements (and indeed technologies) when it comes to creating legitimate governance structures that don’t simply repeat the hierarchies of the existing (centralized) authorities and systems they’re seeking to challenge.

The anarchy-loving crypto community’s inability to coalesce around a way to progress with blockchain technology looks like its own self-defeating irony. A faceless movement fighting for ‘democracy’ from behind an app mask that allows its elite string-pullers and data crunchers to remain out of sight risks looking like another.

None of the protestors we’ve spoken to could say for sure who’s behind Tsunami Democràtic. One suggested it’s just “citizens” or else the same people who helped organize the 2017 Catalan independence referendum — managing the movement of ballot papers into and out of an unofficial network of polling stations so that votes could be collected and counted despite Spanish authorities’ best efforts to seize and destroy them.

There was also a sophisticated technology support effort at the time to support the vote and ensure information about polling stations remained available in the face of website takedowns by the Spanish state.

Our source was equally vague when asked who is behind the Tsunami Democràtic app. Which, if the decentralizing philosophy does indeed run right through the network — as a resilience strategy to protect its members from being ratted out to the police — is what you’d expected.

Any single node wouldn’t know or want to know much of other nodes. But that just leaves a vacuum at the core of the thing which looks alien to democratic enquiry.

One thing Tsunami Democràtic has been at pains to make plain in all (visible) communications to its supporters is that protests must be peaceful. But, again, while technology tools are great enablers it’s not always clear exactly what fire you’re lighting once momentum is pooled and channeled. And protests which started peacefully this week have devolved into running battles with police with missiles being thrown, fires lit and rubber bullets fired.

Some reports have suggested overly aggressive police response to crowds gathering has triggered and flipped otherwise calm protestors. What’s certain is there are injuries on both sides. Today almost 100 people were reported to have been hurt across three nights of protest action. A general strike and the biggest manifestation yet is planned for Friday in Barcelona. So the city is braced for more trouble as smartphone screens blink with fresh protest instructions.

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Social media is of course a conduit for very many things. At its most corporate and anodyne its stated mission can be expressed flavorlessly — as with Facebook’s claimed purpose of ‘connecting people’. (Though distracting and/or outraging is often closer to the mark.)

In practice, thanks to human nature — so that means political agendas, financial interests and all the rest of our various and frequently conflicting desires — all sorts of sparks can fly. None more visibly than during mass mobilizations where groups with a shared agenda rapidly come together to amplify a cause and agitate for change.

Even movements that start with the best intentions — and put their organizers and administration right out in the open for all to see and query — can lose control of outcomes.

Not least because malicious outsiders often seize the opportunity to blend in and act out, using the cover of an organized protest to create a violent disturbance. (And there have been some reports filtering across Catalan social media claiming right wing thugs have been causing trouble and that secret police are intentionally stirring things up to smear the movement.)

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BARCELONA, SPAIN – OCTOBER 17: Protesters take to the streets to demonstrate after the Spanish Supreme Court sentenced nine Catalan separatist leaders to between 9 and 13 years in prison for their role of the 2017 failed Catalan referendum on October 17, 2019 in Barcelona, Spain. (Photo by Jeff J Mitchell/Getty Images)

So if a highly charged political campaign is being masterminded and micromanaged remotely, by unknown entities shielded behind screens, there are many more questions we need to be asking about where the balance of risk and power lies, as well as whether a badge of ‘pro-democracy’ can really be justified.

For Tsunami Democràtic and Catalonia’s independence movement generally this week’s protests look to be just the start of a dug-in, tech-fuelled guerrilla campaign of civil disobedience — to try to force a change of political weather. Spain also has yet another general election looming so the timing offers the whiff of opportunity.

The El Prat blockade that kicked off the latest round of Catalan unrest seemed intended to be a flashy opening drama. To mirror and reference the pro-democracy movement in Hong Kong — which made the international airport there a focal point for its own protests, occupying the terminal building and disrupting flights in an attempt to draw the world’s attention to their plight.

In a further parallel with protests in Hong Kong a crowdsourced map similar to HKmaps.live — the app that dynamically maps street closures and police presence by overlaying emoji onto a city view — is also being prepared for Catalonia by those involved in the pro-independence movement.

At the time of writing a handful of emoji helicopters, road blocks and vans are visible on a map of Barcelona. Tapping on an emoji brings up dated details such as what a police van was doing and whether it had a camera. A verified status suggests multiple reports will be required before an icon is displayed. We understand people will be able to report street activity for live-mapping via a Telegram bot.

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Screenshot of Catalan live map for crowdsourcing street intel

Our source suggested police presence on the map might be depicted by chick emojis. Aka Piolín: The Spanish name for the Loony Tunes cartoon character Tweety Pie — a reference to a colorfully decorated cruise ship used to house scores of Spanish national police in Barcelona harbor during the 2017 referendum, providing instant meme material. Though the test version we’ve seen seems to be using a mixture of dogs and chicks.

Along with the Tsunami Democràtic app the live map means there will soon be two bespoke tools supporting a campaign of civil disobedience whose unknown organizers clearly hope will go the distance.

As we’ve said, the identities of the people coordinating the rebooted movement remain unclear. It’s also unclear who if anyone is financing it.

Our source suggested technical resources to run and maintain the apps are being crowdsourced by volunteers. But some commentators argue that a source of funding would be needed to support everything that’s being delivered, technically and logistically. The app certainly seems far more sophisticated than a weekend project job.

There has been some high level public expressions of support for Tsunami Democràtic — such as from former Barcelona football club trainer, Pep Guardiola, who this week put out a video badged with the Tsunami D logo in which he defends the democratic right to assembly and protest, warning that free speech is being threatened and claiming “Spain is experiencing a drift towards authoritarianism”. So wealthy backers of Catalan independence aren’t exactly hard to find.

Whoever is involved behind the scenes — whether with financing or just technical and organization support — it’s clear that ‘free’ protest energy is being liberally donated to the cause by a highly engaged population of pro-independence supporters.

Grassroots support for Catalan independence is both plentiful, highly engaged, geographically dispersed and cuts across generations — sometimes in surprising ways. One mother we spoke to who said she was too ill to go to Monday’s airport protest recounted her disappointment when her teenage kids told her they weren’t going because they wanted to finish their homework.

Very many protestors did go though, answering calls to action in their messaging apps or via the printable posters made available online by Tsunami Democràtic which some street protestors have been pictured holding.

Thousands of demonstrators occupied the main Barcelona airport terminal building, sat and sang protest songs, daubed quasi apologetic messages on the windows in English (saying a lack of democracy is worse than missing a flight), and faced off to lines of police in riot gear — including units of Spanish national police discharging rubber bullets. One protestor was later reported by local press to have lost an eye.

‘It’s time to make our voice heard in the world,’ runs Tsunami Democràtic’s message on Telegram calling for a blockade of the airport. It then sets out the objective (an airport shut down) and instructs supporters that all forms of transport are “valid” to further the mission of disrupting business as usual. ‘Share and see you all at T1!’ it ends. Around 240,000 people saw the instruction, per Telegram’s ephemeral view counts.

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Demonstrators during a protest against the jailing of Catalan separatists at El Prat airport in Barcelona, Spain, on Monday, Oct. 14, 2019. (Photo by Iranzu Larrasoana Oneca/NurPhoto via Getty Images)

Later the same evening the channel sent another message instructing protestors to call it a night. ‘Today we have been a tsunami,’ it reads in Catalan. ‘We will make every victory a mobilization. We have started a cycle of non-violent, civil disobedience.’ At the time of writing that follow-on missive has registered 300k+ views.

While Tsunami Democràtic is just one of multiple pro-independence groups arranging and mobilizing regional protests — such as the CDRs, aka Comites de Defensa de la Republica, which have been blocking highways in Catalonia for the past two years — it’s quickly garnered majority momentum since quietly uncloaking this summer.

Its Telegram channel — which was only created in August — has piled on followers in recent weeks. Other pro-independence groups are also sharing news and distributing plans over Telegram’s platform and, more widely, on social media outlets such as twitter. Though none has amassed such a big following, nor indeed with such viral speed.

Even Anonymous Catalonia’s Telegram channel, which has been putting out a steady stream of unfiltered crowdsourced protest content this week — replete with videos of burning bins, siren blaring police vans and scattering crowds, interspersed with photos of empty roads (successful blockades) and the odd rubber bullet wound — only has a ‘mere’ 100k+ subscribers.

And while Facebook-owned WhatsApp was a major first source of protest messaging around the 2017 Catalan referendum, with Telegram just coming on stream as an alternative for trying to communicate out of sight of the Spanish state, the protest mobilization baton appears to have been passed more fully to Telegram now.

Perhaps that’s partly due to an element of mistrust around mainstream platforms controlled by tech giants who might be leant on by states to block content (Tsunami Democràtic has said it doesn’t yet have an iOS version of its app, despite many requests for one, because the ‘politics of the App Store is very restrictive’ — making a direct reference to Apple pulling the HKmaps app from its store). Whereas Telegram’s founder, Pavel Durov, is famously resistant to authoritarian state power.

Though, most likely, it’s a result of some powerful tools Telegram provides for managing and moderating channels.

The upshot is Telegram’s messaging platform has enjoyed a surge in downloads in Spain during this month’s regional unrest — as WhatsApp-loving locals flirt with a rival platform also in response to calls from their political channels to get on Telegram for detailed instructions of the next demo.

Per App Annie, Telegram has leapt up the top free downloads charts for Google Play in Spain — rising from eleventh place into the third spot this month. While, for iOS, it’s holding steady in the top free downloads slot.

Also growing in parallel: Unrest on Catalonia’s streets.

Since Monday’s airport protest tensions have certainly escalated. Roads across the region have been blockaded. Street furniture and vehicles torched. DIY missiles thrown at charging police.

By Thursday morning there were reports of police firing teargas and police vehicles being driven at high speed around protesting crowds of youths. Two people were reported run over.

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Anti-riot police officers shoot against protesters after a demonstration called by the local Republic Defence Committees (CDR) in Barcelona on October 17, 2019. – After years of peaceful separatist demonstrations, violence finally exploded on the Catalan streets this week, led by activists frustrated by the political paralysis and infuriated by the Supreme Court’s conviction of nine of its leaders over a failed independence bid. (Photo by LLUIS GENE / AFP) (Photo by LLUIS GENE/AFP via Getty Images)

Helicopters have become a routine sound ripping up the urban night sky. While the tally of injury counts continues rising on both sides. And all the while there are countless videos circulating on social media to be sifted through to reinforce your own point of view — screening looping clashes between protestors and baton wielding police. One video doing the rounds last night appeared to show protestors targeting a police helicopter with fireworks. Russian propaganda outlets have of course been quick to seize on and amplify divisive visuals.

The trigger for a return to waves of technology-fuelled civil disobedience — as were also seen across Catalonia around the time of the 2017 referendum — are lengthy prison terms handed down by Spain’s Supreme Court on Monday. Twelve political and civic society leaders involved in the referendum were convicted, nine on charges of sedition and misuse of public funds. None were found guilty of the more serious charge of rebellion — but the sentences were still harsh, ranging from 13 years to nine.

The jailed leaders — dubbed presos polítics (aka political prisoners) by Catalan society, which liberally deploys yellow looped-ribbons as a solidarity symbol in support of the presos — had already spent almost two years in prison without bail.

A report this week in El Diario, citing a source in Tsunami Democràtic, suggests the activist movement was established in response to a growing feeling across the region’s independence movement that a new way of mobilizing and carrying out protests was needed in the wake of the failed 2017 independence bid.

The expected draconian Supreme Court verdict marked a natural start-date for the reboot.

A reboot has been necessary because, with so many of its figureheads in prison — and former Catalan president Carles Puigdemont in exile in Brussels — there has been something of a leadership vacuum for the secessionist cause.

That coupled with a sense of persecution at the hands of a centralized state which suspended Catalonia’s regional autonomy in the wake of the illegal referendum, invoking a ‘nuclear option’ constitutional provision to dismiss the government and call fresh elections, likely explains why the revived independence movement has been taking inspiration from blockchain-style decentralization.

Our source also told us blockchain thinking has informed the design and structure of the app.

Discussing the developers who have pulled the app together they said it’s not only a passionately engaged Catalan techie diaspora, donating their time and expertise to help civic society respond to what’s seen as long-standing political persecution, but — more generally — coders and technologists with an interest in participating in what they hope will be the largest experiment in participatory democracy and peaceful civil disobedience.

The source pointed to research conducted by Erica Chenoweth, a political scientist at Harvard University, who found non-violent, civil disobedience campaigns to be a far more powerful way of shaping world politics than violence. She also found such campaigns need engage only 3.5% of the population to succeed. And at 300k+ subscribers Tsunami Democràtic’s Telegram channel may have already passed that threshold, given the population of Catalonia is only around 7.6M.

It sounds like some of the developers helping the movement are being enticed by the prospect of applying powerful mobile platform technologies to a strong political cause as a way to stress testing democratic structures — and perhaps play at reconfiguring them. If the tools are successful at capturing intention and sustaining action and so engaging and activating citizens in a long term political campaign.

We’re told the stated intention to open source the app is also a goal in order to make it available for other causes to pick up and use to press for change. Which does start to sound a little bit like regime change as a service…

Stepping back, there is also a question of whether micromanaged civic disobedience is philosophically different to more organic expressions of discontent.

There is an element of non-violent protest being weaponized against an opponent when you’re running it via an app. Because the participants are being remotely controlled and coordinated at a distance, at the same time as ubiquitous location-sensitive mobile technologies mean the way in which the controlling entity speaks to them can be precisely targeted to push their buttons and nudge action.

Yes, it’s true that the right to peaceful assembly and protest is a cornerstone of democracy. Nor is it exactly a new phenomenon that mobile technology has facilitated this democratic expression. In journalist Giles Tremlett’s travelogue book about his adopted country, Ghosts of Spain, he recounts how in the days following the 2004 Madrid train bombings anonymous text messages started to spread via mobile phone — leading to mass, spontaneous street demonstrations.

At the time there were conflicting reports of who was responsible for the bombings, as the government sought to blame the Basque terrorist group ETA for what would turn out to be the work of Islamic terrorists. Right on the eve of an election voters in Spain were faced with a crucial political decision — having just learnt that the police had in fact arrested three Moroccans for the bomb attacks, suggesting the government had been lying.

“A new political phenomenon was born that day — the instant text message demonstration,” Tremlett writes. “Anonymous text messages began to fly from mobile phone to mobile phone. They became known as the pásalo messages, because each ended with an exhortation to ‘Pass it on’. It was like chain mail, but instant.”

More than fifteen years on from those early days of consumer mobile technology and SMS text messaging, instant now means so much more than it did — with almost everyone in a wealthy Western region like Catalonia carrying a powerful, Internet-connected computer and streaming videocamera in their pocket.

Modern mobile technology turns humans into high tech data nodes, capable of receiving and transmitting information. So a protestor now can not only opt in to instructions for a targeted action but respond and receive feedback in a way that makes them feel personally empowered.

From one perspective, what’s emerging from high tech ‘push button’ smartphone-enabled protest movements, like we’re now seeing in Catalonia and Hong Kong, might seem to represent the start of a new model for democratic participation — as the old order of representative democracy fails to keep pace with changing political tastes and desires, just as governments can’t keep up technologically.

But the risk is it’s just a technological elite in the regime-change driving seat. Which sums to governance not by established democratic processes but via the interests of a privileged elite with the wealth and expertise to hack the system and create new ones that can mobilize citizens to act like pawns.

Established democratic processes may indeed be flawed and in need of a degree of reform but they have also been developed and stress-tested over generations. Which means they have layers of accountability checks and balances baked in to try to balance out competing interests.

Throwing all that out in favor of a ‘democracy app’ sounds like the sort of disruption Facebook has turned into an infamous dark art.

For individual protestors, then, who are participating as willing pawns in this platform-enabled protest, you might call it selfie-style self-determination; they get to feel active and present; they experience the spectacle of political action which can be instantly and conveniently snapped for channel sharing with other mobilized friends who then reflect social validation back. But by doing all that they’re also giving up their agency.

Because all this ‘protest’ action is flowing across the surface of an asymmetric platform. The infrastructure natively cloaks any centralized interests and at very least allows opaque forces to push a cause at cheap scale.

“I felt so small,” one young female protestor told us, recounting via WhatsApp audio message, what had gone down during a protest action in Barcelona yesterday evening. Things started out fun and peaceful, with participants encouraged to toss toilet rolls up in the air — because, per the organizer’s messaging, ‘there’s a lot of shit to clean up’ — but events took a different turn later, as protestors moved to another location and some began trying to break into a police building.

A truck arrived from a side street being driven by protestors who used it to blockade the entrance to the building to try to stop police getting out. Police warning shots were fired into the air. Then the Spanish national police turned up, driving towards the crowd at high speed and coming armed with rubber not foam bullets.

Faced with a more aggressive police presence the crowd tried to disperse — creating a frightening crush in which she was caught up. “I was getting crushed all the time. It wasn’t fun,” she told us. “We moved away but there was a huge mass of people being crushed the whole time.”

“What was truly scary weren’t the crowds or the bullets, it was not knowing what was going on,” she added.

Yet, despite the fear and uncertainty, she was back out on the streets to protest again the next night — armed  with a smartphone.

Enric Luján, a PhD student and adjunct professor in political science at the University of Barcelona — and also the guy whose incisive Twitter thread fingers the forces behind the Tsunami Democràtic app as a “technological elite” — argues that the movement has essentially created a “human botnet”. This feels like a questionable capability for a pro-democracy movement when combined with its own paradoxically closed structure.

“The intention appears to be to group a mass movement under a label which, paradoxically, is opaque, which carries the real risk of a lack of internal democracy,” Luján tells TechCrunch. “There is a basic paradox in Tsunami Democràtic. That it’s a pro-democracy movement where: 1) the ‘core’ that decides actions is not accessible to other supporters; 2) it has the word ‘Democràtic’ in its name but its protocols as an organization are extremely vertical and are in the hands of an elite that decides the objectives and defines the timing of mobilization; 3) it’s ‘deterritorialized’ with respect to the local reality (unlike the CDRs): opacity and verticality would allow them to lead the entire effort from outside the country.”

Luján believes the movement is essentially a continuation of the same organizing forces which drove support for pro-independence political parties around the 2017 referendum — such as the Catalan cultural organization Òmnium — now coming back together after a period of “strategic readjustment”.

“Shortly after the conclusion of the referendum, through the arrest of its political leaders, the independence movement was ‘decapitated’ and there were months of political paralysis,” he says, arguing that this explains the focus on applying mobile technology in a way that allows for completely anonymous orchestration of protests, as a strategy to protect itself from further arrests.

“This strategic option, of course, entails lack of public scrutiny of the debates and decisions, which is a problem and involves treating people as ‘pawns’ or ‘human botnets’ acting under your direction,” he adds.

He is also critical of the group not having opened the app’s code which has made it difficult to understand exactly how user data is being handled by the app and whether or not there are any security flaws. Essentially, there is no simple way for outsiders to validate trustworthiness.

His analysis of the app’s APK raises further questions. Luján says he believes it also requests microphone permissions in addition to location and camera access (the latter for reading the QR code).

Our source told us that as far as they are aware the app does not access the microphone by default. Though screenshots of requested permissions which have circulated on social media show a toggle where microphone access seems as if it can be enabled.

And, as Luján points out, the prospect of a powerful and opaque entity with access to the real-time location of thousands of people plus the ability to remotely activate smartphone cameras and microphones to surveil people’s surroundings does sound pretty close to the plot of a Black Mirror episode…

Asked whether he believes we’re seeing an emergent model for a more participatory, grassroots form of democracy enabled by modern mobile technologies or a powerful techie elite playing at reconfiguring existing power structures by building and distributing systems that keep them shielded from democratic view where they can nudge others to spread their message, he says he leans towards the latter.

“It’s a movement with an elite leadership that seems to have had a clear timetable for months. It remains to be seen what they’ll be able to do. But it is clearly not spontaneous (the domain of the website was registered in July) and the application needed months to develop,” he notes. “I am not clear that it can be or was ‘crowdsourced’ — as far as I know, there was no campaign to finance Tsunami or their technological solutions.”

“Release the code,” he adds. “I don’t understand why they haven’t released it. Promising it is easy and is what you expect if you want to present yourself with a minimum of transparency, but there is no defined deadline to do so. For now we have to work with the APK, which is more cumbersome to understand how the app works and how it uses and moves user data.”

“I imagine it is so the police cannot investigate thoroughly, but it also means others lose the possibility of better understanding how a product that’s been designed by people who rely on anonymity works, and have to rely that the elite technologists in charge of developing the app have not committed any security breach.”

So, here too, more questions and more uncertainty.

Europe issues interim antitrust order against Broadcom as probe continues

Europe has ordered chipmaker Broadcom to stop applying exclusivity clauses in agreements with six of its major customers — imposing so called ‘interim measures’ based on preliminary findings from an ongoing antitrust investigation.

The move follows a formal statement of objections issued by the Competition Commission in June. At the time the regulator said it would seek to order Broadcom to halt its behaviour while the investigation proceeds — “to avoid any risk of serious and irreparable harm to competition”.

Today Broadcom has been ordered to unilaterally stop applying “anticompetitive provisions” in agreements with six customers, and to inform them it will no longer apply such measures.

It is also barred from agreeing provisions with the same or similar effect, and from taking any retaliatory practices intended to punish customers with an equivalent effect.

Commenting in a statement, antitrust chief Margrethe Vestager, said: “We have strong indications that Broadcom, the world’s leading supplier of chipsets used for TV set-top boxes and modems, is engaging in anticompetitive practices. Broadcom’s behaviour is likely, in the absence of intervention, to create serious and irreversible harm to competition. We cannot let this happen, or else European customers and consumers would face higher prices and less choice and innovation. We therefore ordered Broadcom to immediately stop its conduct.”

We’ve reached out to Broadcom for comment.

The chipmaker has 30 days to comply with the interim measures, though it can choose to challenge the order in court.

Should the order stand it will apply for up to three years — or the date of adoption of a final competition decision on the case (whichever is earlier).

The Commission began investigations into Broadcom a year ago.

“We have reached the conclusion that in first sight — or in legal lingo, prima facie — Broadcom is currently infringing competition rules by abusing its dominant position in the system on a chip market in TV set-top boxes, fiber modems and xDSL modems,” said Vestager today, speaking during a press conference setting out the interim measures decision.

In June, when the Commission issued formal objections, it said it believes the chipmaker holds a dominant position in markets for the supply of systems-on-a-chip for TV set-top boxes and modems — identifying clauses in agreements with manufacturers that it suspected could harm competition.

At the time it flagged seven agreements. That’s now been reduced to six as the scope of the investigation has been limited to three markets, following submissions from Broadcom after the Statement of Objections.

Vestager said the slight reduction in scope is “a reflection of a process having heard Broadcom’s arguments” over the past few months.

The use of interim measures is noteworthy — as a sign of how the EU regulator is seeking to evolve competition enforcement to keep up with market activity. It’s the first time in 18 years the commission has sought to use the tool.

“Interim measures are one way to tackle the challenge of enforcing our competition rules in a fast and effective manner,” said Vestager. “This is why they are important. And especially that in fast moving markets. Whenever necessary I’m therefore committed to making the best possible use of this important tool.”

During a recent hearing in front of the EU parliament — as the commissioner heads towards another five years as Europe’s competition chief combined with an expanded role as an EVP setting digital policy — she suggested she will seek to make greater use of interim orders as an enforcement tool.

Asked today whether she has already identified other cases where interim measures could be applied, she said she hasn’t but added: “The tool is on the table. And if we find cases that live up to the two things that have to be fulfilled at the same time, yes we will indeed use interim measures more often.

“We don’t have a line up of cases [where interim measures might be applied],” she added. “Two quite substantial conditions will have to be met. One we have to prove that it’s likely there will be serious and irreparable harm to competition, and second we’ll have to find that there is an infringement at first sight.

“[It’s] an instrument, a tool, where we still will have to be careful and precise,” she went on, noting that the Broadcom investigation has taken a full year’s investigation work up to this point. “We are careful and we will not compromise on the right for the company in question to defend themself.”

Responding to a question about whether interim measures might be more difficult to apply in digital vs traditional markets, she said the regulator will need to be able to identify harm.

“The thing is for an interim measures case to work obviously you will have to be able to identify the harm. And that of course when markets are fast moving — that is the first sort of port of call. Can we identify harm in this market?” she said. “But… we do a lot of different things to fully grasp how competition works in fast moving, platform-driven, network-driven markets in order to be able to do that. And to be able to use the instrument if we find a case where this would be the thing to do in order to prevent irreparable and serious harm to competition.”

WeWork pulls thousands of phone booths out of service over formaldehyde scare

WeWork, the co-working empire once valued at $47BN before reality struck plunging the business and its investors into crisis, has another problem to add to its growing pile — one which doesn’t exactly reflect well on its core business of kitting out and maintaining modern working environments.

The problem is a safety concern affecting users of WeWork co-working spaces in the US and Canada. Today the company emailed members in the regions to warn that around 1,600 phone booths installed at WeWork locations have been found to have elevated levels of formaldehyde — which it warns could cause health issues for people exposed to the gas.

WeWork blames the issue on a manufacturer of the booths.

The booths are provided in its co-working spaces for WeWork members to be able to take calls in private — given other common areas are shared by all users. 

“After a member informed us of odor and eye irritation, WeWork performed an analysis, including having an outside consultant conduct a series of tests on a sampling of phone booths. Upon receiving results late last week, we began to take all potentially impacted phone booths out of service,” it writes in an email to members.

Affected phone booths “are being taken out of service immediately, and will be removed from your location as soon as possible”, it adds. 

In addition to ~1,600 booths it has confirmed are affected, a further 700 booths are being taken out of service in what WeWork describes as “an abundance of caution” — i.e. while it carries out more checks — with the promise of a further update once it’s concluded its tests. 

Members wanting to know which booths are safe to use in the meanwhile are told to contact the community team at their WeWork location.

WeWork also says alternative quiet spaces will be provided, such as in conference rooms and unused offices. 

Discussing the health risks of formaldehyde gas — a chemical which is used in various building materials –WeWork’s email warns: “Short-term exposure to formaldehyde at elevated levels may cause acute temporary irritation of the nose, throat, and respiratory system, including coughing or wheezing. These effects are typically transient and usually subside after removal of the formaldehyde source.

“Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers. You can find additional information in this FAQ from the Occupational Safety and Health Administration.”

The email encourages any WeWork members with health concerns to contact a doctor.

A tipster who sent us the email reported experiencing a sensation of “burning eyes” after using the booths.

They also said several people in their team had experienced the same issue.

“Some complained that they felt nauseous after spending time inside the booths,” the tipster wrote. “I never felt that, but the burning eyes was 100% there for me several times. Scary stuff.”

Reached for comment, a WeWork spokesperson confirmed the formaldehyde issue, saying it’s taking “a number” of booths out of service at “some” locations in the US and Canada — due to “potentially elevated levels of formaldehyde caused by the manufacturer”.

“The safety and well-being of our members is our top priority, and we are working to remedy this situation as quickly as possible,” it adds in a statement.

It is not clear exactly how many WeWork locations contain affected booths at this point.

Nor has WeWork provided more detailed information about how long members might have been exposed to elevated levels of formaldehyde — with its email merely suggesting some of the booths have been in place for “months”. 

“The potentially impacted phone booths have been installed over the past few months, exact timing varies based on location,” it writes.

Although clearly the level of exposure will vary from person to person depending on their use of the booths.

The company did not respond to a question asking whether any of its international WeWork locations are affected by the issue.

UK biotech startup Mogrify injects $16M to get novel cell therapies to market soon

Cambridge, UK-based biotech startup Mogrify, which is working on systematizing the development of novel cell therapies in areas such as regenerative medicine, has closed an initial $16 million Series A.

The raise from investors Ahren Innovation CapitalParkwalk and 24Haymarket follows a $4M seed in February — taking its total raised to date to $20M.

Put simply, Mogrify’s approach entails analysis of vast amounts of genomic data in order to identify the specific energetic changes needed to flip an adult cell from one type to another without having to reset it to a stem cell state — with huge potential utility for a wide variety of therapeutic use-cases.

“What we’re trying to do with Mogrify is systematize that process where you can say here’s my source cell, here’s my target cell, here are the differences between the networks… and here are the most likely points of intervention that we’re going to have to make to drive the fate of an adult cell to another adult cell without going through a stem cell stage,” says CEO and investor Dr Darrin Disley.

So far he says it’s successfully converted 15 cells out of 15 tries.

“We’re now rapidly moving those on through our own programs and partnership programs,” he adds.

Mogrify’s business has three main components: Internal program development of cell therapies (current cell therapies it’s developing include enhancing augmented cartilage implantation; non-invasive treatment of ocular damage; and for blood disorders). It’s also developing a universal source of cells for use in immunotherapy — to act as “disease-eaters”, as Disley puts it.

Speculative IP development is another focus. “Because of the systematic nature of the technology we’re in a position very rapidly to identify areas of therapy that have particular cell conversions at their essence — and then drive that IP generation around those cells very quickly and create an IP footprint,” he says.

Partnering deals is the third piece. Mogrify is also working with others to co-develop and bring targeted cell therapies to market. Disley says it’s already closed some partnerships, though it’s not announcing any names yet.

The startup is drawing on around a decade’s worth of recent work genomics science. And specifically on a data-set generated by an international research effort, called Fantom 5, which its founders had early access to.

“We started with that massive Fantom data-set. That’s the baseline, the background if you like. Think of it like two cities in America: Chicago and New York. There’s your source cell, there’s your target cell. And because you have all the background data of every piece of the network — every building, every skyscraper — if you look at the two you can identify the difference in the gene expression, therefore you can identify which factors will regulate a wide array of those genes. So you can start identifying the differences between the two,” explains Disley.

“We’ve then added to that massive data sets in DNA-protein and protein-protein interactions… so you start to now overlay all of that data. And then we’ve added on top of that new next-gen sequencing data and epigenetic data. So you’ve now got this massive data-set. It’s like having a network map between all the different cell types. So you’re therefore then able to make predictions on how many interventions, what interventions are needed to drive that change of state — and it’s systematic. It doesn’t just recommend one set. There’s a ranking. It can go down to hundreds. And there is some overlap and redundancies, so for example if one — you’re preferred thing — doesn’t work the way you wanted it to you can go back and select another.

“Or if there’s an IP issue around that factor you can ignore that piece of the network and use an alternative route. And once you’ve got to your target cell, if it needs to some tweaking you can actually re-sequence it and take that back and that’s your starting cell again. And you can go through this optimization process. So what comes out at the other end… you’ve got a patent that it like a small molecule composition of matter patent; it’s the therapeutic. So you’re not coming out with the target, you’re actually coming out with here is the composition of matter on the cell.”

In terms of timeframe for getting novel cell therapies from concept to market Disley suggests a range of between four and seven years.

“Once you’ve identified the cell type that can be be the basis of your GMP manufacturable process and then you can tweak that to take it to the therapeutic indication you can develop a cell therapy and bring that to market in five years,” he says. “It’s not like the old days with small molecules where it can take ten, 15, 20 years to get a serious therapy on the market.

“When you’re treating patients… is because there are no other treatments for them, when you go into phase two and do your safety study [and] efficacy study you’re actually treating patients already in terms of their disease. And if you get it right you can get a fast track approval. Or a conditional approval… so that you may not even have to do a phase 3 [testing].”

“We’re not using any artificial intelligence here,” he also emphasizes, pointing to his experience investing in companies in the “big extreme data space” which he argues do best by using “unbiased approaches”.

“AI I think is still trying to find its way,” he continues. “Because in its essence it will be able to get to answers with smaller amounts of data but it’s only as good as the data you train it on. And the danger with AI… it just learns to recognize what you want it to recognize. It doesn’t know what it doesn’t know.

“In combination, once you continue to generate this massive cell network data etc you can start applying aspects of machine learning and AI. But you couldn’t do Mogrify with AI without the data. You have to do it that way. And the data is so complex and combinatorial — 2,000 transcription factors, in terms of regulation of those genes, they then interact in network to do the protein-protein interactions, you’ve got epigenetic aspects of that, you could even start adding cell microbiome effects to that later — so you’ve got a lot of factors that could influence the phenotype of the cell that’s coming out the other end.

“So I think with AI you have to be a little careful. I think it will be a more optimizing tool once you’ve got sufficient confidence in your system.”

The plan for the Series A funding is to ramp up Mogrify’s corporate operations and headcount — including bringing in senior executives and expertise from industry — as well as spending to fund its therapy development programs.

Disley notes its recent appointment of Dr Jane Osbourn as chair as one example.

“We’re bringing in more people with a lot of cell therapy experience from big pharma, around then more on the manufacturing and delivery of that — so really building so that we’re not just a tech company,” he says. “We’ve very strong already, we’re already 35 people on the tech and early stage drug discovery side — we’re going to add another 30 to that. But that’s going to be increasingly more people with big pharma, cell therapy development, manufacturing experience to get products on to market.”

Partner search is another focus for the Series A. “We’re trying to find the right strategy partners. We’re not doing services, we’re not doing products — so we want to find the right strategic partners in terms of doing multi-programs in a partnership,” he adds. “And then a series of more tactical deals where people have got a specific problem with a cell conversion. These more turnkey deals, if you like. We still get up-fronts, milestones and royalties but they’re smaller.”

Despite now having enough money for the next two to two and half years it’s also leaving the Series A open to continue expanding the round over the next 12 months — up to a maximum of another $16M.

“We have so many interested investors,” Disley tells us. “This round we didn’t actually open our round. We did it with internal investors and people we’re very close to who we’ve worked with before, and there were investors lining up… [so] we are leaving it open so that in these next 12 months we may choose to increase the amount we bring in.

“It would be a maximum of another $16M if it was an A round but we may decide just to go straight forward if we progress very fast to a much bigger B round.”

California’s Privacy Act: What you need to know now

This week California’s attorney general, Xavier Becerra, published draft guidance for enforcing the state’s landmark privacy legislation.

The draft text of the regulations under the California Consumer Privacy Act (CCPA) will undergo a public consultation period, including a number of public hearings, with submissions open until December 6 this year.

The CCPA itself will take effect in the state on January 1, with a further six months’ grace period before enforcement of the law begins.

“The proposed regulations are intended to operationalize the CCPA and provide practical guidance to consumers and businesses subject to the law,” writes the State of California’s Department of Justice in a press release announcing the draft text. “The regulations would address some of the open issues raised by the CCPA and would be subject to enforcement by the Department of Justice with remedies provided under the law.”

Translation: Here’s the extra detail we think is needed to make the law work.

The CCPA was signed into law in June 2018 — enshrining protections for a sub-set of US citizens against their data being collected and sold without their knowledge.

The law requires businesses over a certain user and/or revenue threshold to disclose what personal data they collect; the purposes they intend to use the data for; and any third parties it will be shared with; as well as requiring that they provide a discrimination-free opt-out to personal data being sold or shared.

Businesses must also comply with consumer requests for their data to be deleted.

Trump gets on Twitch

The reelection campaign will be livestreamed. US president Donald Trump has joined Amazon-owned livestreaming platform Twitch.

Twitch is best known as a social video streaming platform for gamers but does host other content, including politics.

The verified DonaldTrump Twitch account, spotted earlier by Reuters, has just one video in the recent broadcast section so far: A livestream of a Trump rally which took place in Minneapolis yesterday evening.

Alongside the saved video of this broadcast is a growing selection of user generated clips culled from the stream, with titles such as “This is our president.”, “LOL”, “KEK” and “pepelaugh”.

Another clip remarks on how a single black man — who’s visible in the top corner of the shot of the audience behind Trump — vanishes as “they zoom him out of the picture”.

Trump is not the only high profile US politician to be taking to Twitch to broadcast campaign rallies in real time ahead of next year’s presidential election.

Democratic senator Bernie Sanders, who is making a pitch to be the party’s presidential candidate, joined the platform a few months ago. And at the time of writing Sanders still has more followers than Trump on Twitch (88,795 vs 37,754).

Over on Twitter, meanwhile — Trump’s go-to social media soapbox for skewering opponents and deflecting criticism, via his preferred medium of the early morning attack tweet — the president has ~65.6M followers.

So Twitter is very unlikely to be concerned that its highest profile user is flirting with Amazon’s social streaming platform. (Though it’s much less clear how happy “Jeff Bozo” will be about Trump getting on Twitch.)

Trump has dabbled with using Twitter’s own video streaming tool, Periscope. But the choice of Twitch for streaming his campaign rallies looks mostly like a case of horses for courses. Periscope is more for on-the-fly mobile streaming, whereas Twitch is a platform built for playing to (and building) a ‘lean back’ audience.

Troll culture also thrives on gamer Twitch. And Trump is of course edgelord of the trolls. Ergo he should fit right in.

With Periscope Twitter has been taking a stronger approach to tackling abusive comments in recent years (and also trying to fight fake and spam content) — in line with its stated desire to increase ‘conversational health’ on its platforms. So it’s probably happy to have dodged a bullet here.

Certainly Twitter CEO Jack Dorsey has more enough flying his way over whatever Trump choses to tweet next.

European risk report flags 5G security challenges

European Union Member States have published a joint risk assessment report into 5G technology which highlights increased security risks that will require a new approach to securing telecoms infrastructure.

The EU has so far resisted pressure from the U.S. to boycott Chinese tech giant Huawei as a 5G supplier on national security grounds, with individual Member States such as the UK also taking their time to chew over the issue.

But the report flags risks to 5G from what it couches as “non-EU state or state-backed actors” — which can be read as diplomatic code for Huawei. Though, as some industry watchers have been quick to point out, the label could be applied rather closer to home in the near future, should Brexit comes to pass…

Back in March, as European telecom industry concern swirled about how to respond to US pressure to block Huawei, the Commission stepped in to issue a series of recommendations — urging Member States to step up individual and collective attention to mitigate potential security risks as they roll out 5G networks.

Today’s risk assessment report follows on from that.

It identifies a number of “security challenges” that the report suggests are “likely to appear or become more prominent in 5G networks” vs current mobile networks — linked to the expanded use of software to run 5G networks; and software and apps that will be enabled by and run on the next-gen networks.

The role of suppliers in building and operating 5G networks is also noted as a security challenge, with the report warning of a “degree of dependency on individual suppliers”, and also of too many eggs being placed in the basket of a single 5G supplier.

Summing up the effects expected to follow 5G rollouts, per the report, it predicts:

  • An increased exposure to attacks and more potential entry points for attackers: With 5G networks increasingly based on software, risks related to major security flaws, such as those deriving from poor software development processes within suppliers are gaining in importance. They could also make it easier for threat actors to maliciously insert backdoors into products and make them harder to detect.
  • Due to new characteristics of the 5G network architecture and new functionalities, certain pieces of network equipment or functions are becoming more sensitive, such as base stations or key technical management functions of the networks.
  • An increased exposure to risks related to the reliance of mobile network operators on suppliers. This will also lead to a higher number of attacks paths that might be exploited by threat actors and increase the potential severity of the impact of such attacks. Among the various potential actors, non-EU States or State-backed are considered as the most serious ones and the most likely to target 5G networks.
  • In this context of increased exposure to attacks facilitated by suppliers, the risk profile of individual suppliers will become particularly important, including the likelihood of the supplier being subject to interference from a non-EU country.
  • Increased risks from major dependencies on suppliers: a major dependency on a single supplier increases the exposure to a potential supply interruption, resulting for instance from a commercial failure, and its consequences. It also aggravates the potential impact of weaknesses or vulnerabilities, and of their possible exploitation by threat actors, in particular where the dependency concerns a supplier presenting a high degree of risk.
  • Threats to availability and integrity of networks will become major security concerns: in addition to confidentiality and privacy threats, with 5G networks expected to become the backbone of many critical IT applications, the integrity and availability of those networks will become major national security concerns and a major security challenge from an EU perspective.

The high level report is a compilation of Member States’ national risk assessments, working with the Commission and the European Agency for Cybersecurity. It’s couched as just a first step in developing a European response to securing 5G networks.

“It highlights the elements that are of particular strategic relevance for the EU,” the report says in self-summary. “As such, it does not aim at presenting an exhaustive analysis of all relevant aspects or types of individual cybersecurity risks related to 5G networks.”

The next step will be the development, by December 31, of a toolbox of mitigating measures, agreed by the Network and Information Systems Cooperation Group, which will be aimed at addressing identified risks at national and Union level.

“By 1 October 2020, Member States – in cooperation with the Commission – should assess the effects of the Recommendation in order to determine whether there is a need for further action. This assessment should take into account the outcome of the coordinated European risk assessment and of the effectiveness of the measures,” the Commission adds.

For the toolbox a variety of measures are likely to be considered, per the report — consisting of existing security requirements for previous generations of mobile networks with “contingency approaches” that have been defined through standardisation by the mobile telephony standards body, 3GPP, especially for core and access levels of 5G networks.

But it also warns that “fundamental differences in how 5G operates also means that the current security measures as deployed on 4G networks might not be wholly effective or sufficiently comprehensive to mitigate the identified security risks”, adding that: “Furthermore, the nature and characteristics of some of these risks makes it necessary to determine if they may be addressed through technical measures alone.

“The assessment of these measures will be undertaken in the subsequent phase of the implementation of the Commission Recommendation. This will lead to the identification of a toolbox of appropriate, effective and proportionate possible risk management measures to mitigate cybersecurity risks identified by Member States within this process.”

The report concludes with a final line saying that “consideration should also be given to the development of the European industrial capacity in terms of software development, equipment manufacturing, laboratory testing, conformity evaluation, etc” — packing an awful lot into a single sentence.

The implication is that the business of 5G security will need to get commensurately large to scale to meet the multi-dimensional security challenge that goes hand in glove with the next-gen tech. Just banning a single supplier isn’t going to cut it.

Europe’s recharged antitrust chief makes her five-year pitch to be digital EVP

Europe’s competition commissioner Margrethe Vestager, set for a dual role in the next Commission, faced three hours of questions from members of four committees in the European Parliament this afternoon, as MEPs got their chance to interrogate her priorities for a broader legislative role that will shape pan-EU digital strategy for the next five years.

As we reported last month, Vestager is headed for an expanded role in the incoming European Commission with president-elect Ursula von der Leyen picking her as an executive VP overseeing a new portfolio called “Europe fit for the digital age.”

She is also set to retain her current job as competition commissioner. And a question she faced more than once during today’s hearing in front of MEPs, who have a confirming vote on her appointment, was whether the combined portfolio wasn’t at risk of a conflict of interest?

Or whether she “recognized the tension between objective competition enforcement and industrial policy interests in your portfolio,” as one MEP put it, before asking whether she would “build Chinese walls” within it to avoid crossing the streams of enforcement and policymaking.

Vestager responded by saying it was the first question she’d asked herself on being offered the role — before laying out flat reasoning that “the independence in law enforcement is non-negotiable.”

“It has always been true that the commissioner for competition has been part of the College. And every decision we take also in competition is a collegial decision,” she said. “What justifies that is of course that every decision is subject to not one but 2x legal scrutiny if need be. And the latest confirmation of this set up was two judgments in 2011 — where it was looked into whether this set up… is in accordance with our human rights and that has been found to be so. So the set up, as such, is as it should be.”

The commissioner and commissioner-designate responded capably to a wide range of questions reflecting the broad span of her new responsibilities — fielding questions on areas including digital taxation; platform power and regulation; a green new deal; AI and data ethics; digital skills and research; and small business regulation and funding, as well as queries around specific pieces of legislation (such as ePrivacy and Copyright Reform). 

Climate change and digital transformation were singled out in her opening remarks as two of Europe’s biggest challenges — ones she said will require both joint working and a focus on fairness.

Europe is filled with highly skilled people, we have excellent infrastructure, fair and effective laws. Our Single Market gives European businesses the room to grow and innovate, and be the best in the world at what they do,” she said at the top of her pitch to MEPs. “So my pledge is not to make Europe more like China, or America. My pledge is to help make Europe more like herself. To build on our own strengths and values, so our society is both strong and fair. For all Europeans.”

Building trust in digital services

In her opening remarks Vestager said that if confirmed she will work to build trust in digital services — suggesting regulation on how companies collect, use and share data might be necessary to ensure people’s data is used for public good, rather than to concentrate market power.

It’s a suggestion that won’t have gone unnoticed in Silicon Valley.

“I will work on a Digital Services Act that includes upgrading our liability and safety rules for digital platforms, services and products,” she pledged. “We may also need to regulate the way that companies collect and use and share data — so it benefits the whole of our society.”

“As global competition gets tougher we’ll need to work harder to preserve a level playing field,” she also warned.

But asked directly during the hearing whether Europe’s response to platform power might include breaking up overbearing tech giants, Vestager signaled caution — saying such an intrusive intervention should only be used as a last resort, and that she has an obligation to try less drastic measures first. (It’s a position she’s set out before in public.)

“You’re right to say fines are not doing the trick and fines are not enough,” she said in response to one questioner on the topic. Another MEP complained fines on tech giants are essentially just seen as an “operating expense.”

Vestager went on to cite the Google AdSense antitrust case as an example of enforcement that hasn’t succeeded because it has failed to restore competition. “Some of the things that we will of course look into is do we need even stronger remedies for competition to pick up in these markets,” she said. “They stopped their behavior. That’s now two years ago. The market hasn’t picked up. So what do we do in those kind of cases? We have to consider remedies that are much more far reaching.

“Also before we reach for the very, very far reaching remedy to break up a company — we have that tool in our toolbox but obviously it is very far reaching… My obligation is to ensure that we do the least intrusive thing in order to make competition come back. And in that respect, obviously, I am willing to explore what do we need more, in competition cases, for competition to come back.”

Competition law enforcers in Europe will have to consider how to make sure rules enforce fair competition in what Vestager described as a “new phenomenon” of “competition for a market, not just in a market” — meaning that whoever wins the competition becomes “the de facto rule setter in this market.”

Regulating platforms on transparency and fairness is something on which European legislators have already agreed — earlier this year. Though that platform to business regulation has yet to come into force. “But it will also be a question for us as competition law enforcers,” Vestager told MEPs.

Making use of existing antitrust laws but doing so with greater speed and agility, rather than a drastic change of competition approach, appeared to be her main message — with the commissioner noting she’d recently dusted off interim measures in an ongoing case against chipmaker Broadcom; the first time such an application has been made for 20 years.

“It’s a good reflection of the fact that we find it a very high priority to speed up what we do,” she said, adding: “There’s a limit as to how fast law enforcement can work, because we will never compromise on due process — on the other hand we should be able to work as fast as possible.”

Her responses to MEPs on platform power favored greater regulation of digital markets (potentially including data), markets which have become dominated by data-gobbling platforms — rather than an abrupt smashing of the platforms themselves. So not an Elizabeth Warren “existential” threat to big tech, then, but from a platform point of view Vestager’s preferred approach might just sum to death by a thousand legal cuts.

“One of course could consider what kind of tools do we need?,” she opined, talking about market reorganization as a means of regulating platform power. “[There are] different ways of trying to re-organize a marketplace if the competition authority finds that the way it’s working is not beneficial for fair competition. And those are tools that can be considered in order to sort of re-organize before harm is done. Then you don’t punish because no infringement is found but you can give very direct almost orders… as to how a market should be organized.”

Artificial intelligence with a purpose

On artificial intelligence — which the current Commission has been working on developing a framework for ethical design and application — Vestager’s opening remarks contained a pledge to publish proposals for this framework — to “make sure artificial intelligence is used ethically, to support human decisions and not undermine them” — and to do so within her first 100 days in office.

That led one MEP to question whether it wasn’t too ambitious and hasty to rush to control a still emerging technology. “It is very ambitious,” she responded. “And one of the things that I think about a lot is of course if we want to build trust then you have to listen.

“You cannot just say I have a brilliant idea, I make it happen all over. You have to listen to people to figure out what would be the right approach here. Also because there is a balance. Because if you’re developing something new then — exactly as you say — you should be very careful not to over-regulate.

“For me, to fulfill these ambitions, obviously we need the feedback from the many, many businesses who have taken upon them to use the assessment list and the principles [recommended by the Commission’s HLEG on AI] of how to create AI you can trust. But I also think, to some degree, we have to listen fast. Because we have to talk with a lot of different people in order to get it right. But it is a reflection of the fact that we are in hurry. We really need to get our AI strategy off the ground and these proposals will be part of that.”

Europe could differentiate itself — and be “a world leader” — by developing “AI with a purpose,” Vestager suggested, pointing to potential applications for the tech such as in healthcare, transportation and combating climate change, which she said would also work to further European values.

“I don’t think that we can be world leaders without ethical guidelines,” she said of AI. “I think we will lose it if we just say no let’s do as they do in the rest of the world — let’s pool all the data from everyone, no matter where it comes from, and let’s just invest all our money. I think we will lose out because the AI you create because you want to serve humans. That’s a different sort of AI. This is AI with a purpose.”

On digital taxation — where Vestager will play a strategic role, working with other commissioners — she said her intention is to work toward trying to achieve global agreement on reforming rules to take account of how data and profits flow across borders. But if that’s not possible she said Europe is prepared to act alone — and quickly — by the end of 2020.

“Surprising things can happen,” she said, discussing the challenge of achieving even an EU-wide consensus on tax reform, and noting how many pieces of tax legislation have already been passed in the European Council by unanimity. “So it’s not undoable. The problem is we have a couple of very important pieces of legislation that have not been passed.

“I’m still kind of hopeful in the working way that we can get a global agreement on digital taxation. If that is not the case, obviously we will table and push for a European solution. And I admire the Member States who’ve said we want a European or global solution, but if that isn’t to be we’re willing to do that by ourselves in order to be able to answer to all the businesses who pay their taxes.”

Vestager also signaled support for exploring the possibility of amending Article 116 of the Treaty on the Functioning of the EU, which relates to competition-based distortion of the internal market, in order to enable tax reform to be passed by a qualified majority, instead of unanimously — as a potential strategy for getting past the EU’s own current blocks to tax reform.

“I think definitely we should start exploring what would that entail,” she said in response to a follow-up question. “I don’t think it’s a given that it would be successful, but it’s important that we take the different tools that the treaty gives us and use these tools if need be.”

During the hearing she also advocated for a more strategic use of public procurement by the EU and Member States — to push for more funding to go into digital research and business innovation that benefits common interests and priorities.

“It means working together with Member States on important projects of common European interest. We will bring together entire value chains, from universities, suppliers, manufacturers all the way to those who recycle the raw material that is used in manufacturing,” she said.

“Public procurement in Europe is… a lot of money,” she added. “And if we also use that to ask for solutions well then we can have also maybe smaller businesses to say I can actually do that. So we can make an artificial intelligence strategy that will push in all different sectors of society.”

She also argued that Europe’s industrial strategy needs to reach beyond its own Single Market — signaling a tougher approach to market access to those outside the bloc.

And implying she might favor less of a free-for-all when it comes to access to publicly funded data — if the value it contains risks further entrenching already data-rich, market-dominating giants at the expense of smaller local players.

“As we get more and more interconnected, we are more dependent and affected by decisions made by others. Europe is the biggest trading partner of some 80 countries, including China and the U.S. So we are in a strong position to work for a level global playing field. This includes pursuing our proposal to reform the World Trade Organization. It includes giving ourselves the right tools to make sure that foreign state ownership and subsidies do not undermine fair competition in Europe,” she said.

“We have to figure out what constitutes market power,” she went on, discussing how capacity to collect data can influence market position, regardless of whether it’s directly linked to revenue. “We will expand our insights as to how this works. We have learned a lot from some of the merger cases that we have been doing to see how data can work as an asset for innovation but also as a barrier to entry. Because if you don’t have the right data it’s very difficult to produce the services that people are actually asking for. And that becomes increasingly critical when it comes to AI. Because once you have it then you can do even more.

“I think we have to discuss what we do with all the amazing publicly funded data that we make available. It’s not to be overly biblical but we shouldn’t end up in a situation where ‘those who have shall more be given.’ If you have a lot already then you also have the capabilities and the technical insight to make very good use of it. And we do have amazing data in Europe. Just think about what can be assessed in our supercomputers… they are world-class… And second when it comes to both [EU sat-nav] Galileo and [earth observation program] Copernicus. Also here data is available. Which is an excellent thing for the farmer doing precision farming and saving in pesticides and seeds and all of that. But are really happy that we also make it available for those who could actually pay for it themselves?

“I think that is a discussion that we will have to have — to make sure that not just the big ones keep taking for themselves but the smaller ones having a fair chance.”

Rights and wrongs

During the hearing Vestager was also asked whether she supported the controversial EU copyright reform.

She said she supports the “compromise” achieved — arguing that the legislation is important to ensure artists are rewarded for the work they do — but stressed that it will be important for the incoming Commission to ensure Member States’ implementations are “coherent” and that fragmentation is avoided.

She also warned against the risk of the same “divisive” debates being reopened afresh, via other pieces of legislation.

“I think now that the copyright issue has been settled it shouldn’t be reopened in the area of the Digital Services Act,” she said. “I think it’s important to be very careful not to do that because then we would lose speed again when it comes to actually making sure there is remuneration for those who hold copyright.”

Asked in a follow-up question how, as the directive gets implemented by EU Member States, she will ensure freedom of speech is protected from upload filter technologies — which is what critics of the copyright reform argue the law effectively demands that platforms deploy — Vestager hedged, saying: “[It] will take a lot of discussions and back and forth between Member States and Commission, probably. Also this parliament will follow this very closely. To make sure that we get an implementation in Member States that are similar.”

“One has to be very careful,” she added. “Some of the discussions that we had during the adoption of the copyright directive will come back. Because these are crucial debates. Because it’s a debate between the freedom of speech and actually protecting people who have rights. Which is completely justified… Just as we have fundamental values we also have fundamental discussions because it’s always a balancing act how to get this right.”

The commissioner also voiced support for passing the ePrivacy Regulation. “It will be high priority to make sure that we’re able to pass that,” she told MEPs, dubbing the reform an important building block.

“One of the things I hope is that we don’t just always decentralize to the individual citizens,” she added.  “Now you have rights, now you just go and force them. Because I know I have rights but one of my frustrations is how to enforce them? Because I am to read page after page after page and if I’m not tired and just forget about it then I sign up anyway. And that doesn’t really make sense. We still have to do more for people to feel empowered to protect themselves.”

She was also asked for her views on adtech-driven microtargeting — as a conduit for disinformation campaigns and political interference — and more broadly as so-called “surveillance capitalism.” “Are you willing to tackle adtech-driven business models as a whole?,” she was asked by one MEP. “Are you willing to take certain data exploitation practices like microtargeting completely off the table?”

Hesitating slightly before answering, Vestager said: “One of the things I have learned from surveillance capitalism and these ideas is it’s not you searching Google it is Google searching you. And that gives a very good idea about not only what you want to buy but also what you think. So we have indeed a lot to do. I am in complete agreement with what has been done so far — because we needed to do something fast. So the Code of Practice [on disinformation] is a very good start to make sure that we get things right… So I think we have a lot to build on.

“I don’t know yet what should be the details of the Digital Services Act. And I think it’s very important that we make the most of what we have since we’re in a hurry. Also to take stock of what I would call digital citizens’ rights — the GDPR [General Data Protection Regulation] — that we can have national authorities enforce that in full, and hopefully also to have a market response so that we have privacy by design and being able to choose that. Because I think it’s very important that we also get a market response to say, well, you can actually do things in a very different way than just to allow yourself to feel forced to sign up to whatever terms and conditions that are put in front of you.

“I myself find it very thought-provoking if you have the time just once in a while to read the T&Cs now when they are obliged, thanks to this parliament, to write in a way that you can actually understand that makes it even more scary. And very often it just makes me think, thanks but no thanks. And that of course is the other side of that coin. Yes, regulation. But also us as citizens to be much more aware of what kind of life we want to live and what kind of democracy we want to have. Because it cannot just be digital. Then I think we will lose it.”

In her own plea to MEPs, Vestager urged them to pass the budget so that the Commission can get on with all the pressing tasks in front of it. “We have proposed that we increase our investments quite a lot in order to be able to do all this kind of stuff,” she said.

“First things first, I’m sorry to say this, we need the money. We need funding. We need the programs. We need to be able to do something so that people can see that businesses can use funds to invest in innovation, so that researchers can make their networks work all over Europe. That they get the funding actually to get there. And in that respect I hope that you will help push for the multi-annual financial framework to be in place. I don’t think that Europeans have any patience for us when it comes to these different things that we would like to be real. That is now, that is here.”

Laurel Bowden of VC firm 83North on the European deep tech and startup ecosystems

London and Tel Aviv based VC firm 83North has closed out its fifth fund at $300 million, as we reported earlier. It last raised a $250 million fund in 2017 and expects to continue the same investment mix, while tracking developments in emerging areas like healthcare AI and autonomous vehicles.

In a conversation with general partner Laurel Bowden, the veteran investor shared a few further thoughts with Extra Crunch — talking about the tech scene in Europe vs Israel, what the firm looks for in a team and tips on scaling globally.

The interview has been lightly edited for clarity. 

TechCrunch: Is Europe starting to catch up to Israel when it comes to deep tech startups?

Laurel Bowden: We clearly think we have in our portfolio some deep tech. And in other VC portfolios too — there’s clearly some deep tech [coming out of Europe]. And then on the reverse side you’ve seen more consumer-related stuff coming out of Israel. But still if you take a blanket look, we see more data infrastructure, security, storage coming out of Israel than we see in Europe — that’s for sure.

83North closes $300M fifth fund focused on Europe, Israel

83North has closed its fifth fund, completing an oversubscribed $300 million raise and bringing its total capital under management to $1.1BN+.

The VC firm, which spun out from Silicon Valley giant Greylock Partners in 2015 — and invests in startups in Europe and Israel, out of offices in London and Tel Aviv — last closed a $250M fourth fund back in 2017.

It invests in early and growth stage startups in consumer and enterprise sectors across a broad range of tech areas including fintech, data centre & cloud, enterprise software and marketplaces.

General partner Laurel Bowden, who leads the fund, says the latest close represents investment business as usual, with also no notable changes to the mix of LPs investing for this fifth close.

“As a fund we’re really focused on keeping our fund size down. We think that for just the investment opportunity in Europe and Israel… these are good sized funds to raise and then return and make good multiples on,” she tells TechCrunch. “If you go back in the history of our fundraising we’re always somewhere between $200M-$300M. And that’s the size we like to keep.”

“Of course we do think there’s great opportunities in Europe and Israel but not significantly different than we’ve thought over the last 15 years or so,” she adds.

83North has made around 70 investments to date — which means its five partners are usually making just one investment apiece per year.

The fund typically invests around $1M at the seed level; between $4M-$8M at the Series A level and up to $20M for Series B, with Bowden saying around a quarter of its investments go into seed (primarily into startups out of Israel); ~40% into Series A; and ~30% Series B.

“It’s somewhat evenly mixed between seed, Series A, Series B — but Series A is probably bigger than everything,” she adds.

It invests roughly half and half in its two regions of focus.

The firm has had 15 exits of portfolio companies (three of which it claims as unicorns). Recent multi-billion dollar exits for Bowden are: Just Eat, Hybris (acquired by SAP), iZettle (acquired by PayPal) and Qlik.

While 83North has a pretty broad investment canvas, it’s open to new areas — moving into IoT (with recent investments in Wiliot and VDOO), and also taking what it couches as a “growing interest” in healthtech and vertical SaaS. 

“Some of my colleagues… are looking at areas like lidar, in-vehicle automation, looking at some of the drone technologies, looking at some even healthtech AI,” says Bowden. “We’ve looked at a couple of those in Europe as well. I’ve looked, actually, at some healthtech AI. I haven’t done anything but looked.

“And also all things related to data. Of course the market evolves and the technology evolves but we’ve done things related to BI to process automation through to just management of data ops, management of data. We always look at that area. And think we’ll carry on for a number of years. ”

“In venture you have to expand,” she adds. “You can’t just stay investing in exactly the same things but it’s more small additional add-ons as the market evolves, as opposed to fundamental shifts of investment thesis.”

Discussing startup valuations, Bowden says European startups are not insulated from wider investment dynamics that have been pushing startup valuations higher — and even, arguably, warping the market — as a consequence of more capital being raised generally (not only at the end of the pipe).

“Definitely valuations are getting pushed up,” she says. “Definitely things are getting more competitive but that comes back to exactly why we’re focused on raising smaller funds. Because we just think then we have less pressure to invest if we feel that valuations have got too high or there’s just a level… where startups just feel the inclination to raise way more money than they probably need — and that’s a big reason why we like to keep our fund size relatively small.”