Daily Crunch: Facebook embraces remote work

Facebook takes more steps to support and expand a remote workforce, IBM announces layoffs and TechCrunch’s big annual conference is going virtual. (I know, I know — I have mixed feelings about it, too.)

Here’s your Daily Crunch for May 22, 2020.

1. Facebook makes big remote work moves with plan for new hubs in Dallas, Denver and Atlanta

Facebook CEO Mark Zuckerberg estimated that over the course of the next decade, half of the company could be working fully remotely. As the next step toward that goal, Facebook will be setting up new company hubs in Denver, Dallas and Atlanta.

For Menlo Park employees looking for greener pastures, there’s one sizable catch. Starting on January 1 of next year, the company will localize all salaries, which means scaling compensation to the local cost of living.

2. IBM confirms layoffs are happening, but won’t provide details

IBM isn’t sharing details, but analyst Patrick Moorhead said. “I’m hearing it’s a balancing act between business units. IBM is moving as many resources as it can to the cloud.”

3. TechCrunch Disrupt 2020 is going virtual

As you can imagine, this is largely due to the impact that the coronavirus has had on the world. But it also gives us a chance to make our event even more accessible to more people than ever before, and Disrupt will now stretch over five days — September 14-18.

4. Netflix to start cancelling inactive customers’ subscriptions

Netflix said it will ask customers who have not watched anything in a year or more if they want to maintain their subscription. If it doesn’t hear back, it will cancel their membership.

5. API startups are so hot right now

Alex Wilhelm looks at FalconX, Treasury Prime, Spruce, Daily.co, Skyflow and Evervault — all API-focused startups that are experiencing some early success. (Extra Crunch membership required.)

6. Magic Leap has apparently raised another $350 million, in spite of itself

Magic Leap has reportedly received a $350 million lifeline, a month after slashing 1,000 jobs and dropping its consumer business. Noted by Business Insider and confirmed by The Information, CEO Rony Abovitz sent a note to staff announcing the funding, courtesy of unnamed current and new investors.

7. Cake brings a Swedish take on e-motorcycle design to the US

The Stockholm-based mobility startup’s debut, the Kalk OR, is a 150-pound, battery-powered two-wheeler engineered for agile off-road riding and available in a street-legal version.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

Oculus surpasses $100 million in Quest content sales

Despite a handful of devices and years of sales, Facebook has never shared unit sales of any of their VR headsets.

Today, Oculus released a new sales figure as the company reaches the 1 year anniversary of the release of the Quest headset. We didn’t get unit sales but the company did share that they’ve sold $100 million worth of Quest content in the device’s first year — a number that indicates that while the platform is still nascent, a handful of developers are definitely making it work for them.

Of that $100 million, Facebook says 20 titles have pulled in at least $1 million each with 10 of those eclipsing $2 million in sales. Just this past October, Facebook CEO Mark Zuckerberg had shared that Oculus had surpassed $100 million worth of content across all devices in its store, so this announcement seems to showcase that Quest titles are selling much faster than content for the company’s PC-based headsets.

Oculus has been struggling to keep supply chains open over the past several months in the midst of the COVID-19 pandemic — most of their headsets, like the Quest, have been sold out for most of 2020.

There are signs of growth though it’s clear the Quest is still a niche product. Facebook detailed on its most recent earnings call that the 80% year-over-year quarterly growth of its quarterly “Other” revenue [$297 million] was “driven primarily by Oculus products.”  Zuckerberg commented on sales of the company’s flagship VR device, “Quest has surpassed our expectations. I wish we could make more of them faster.”

Over the past year, Oculus has had good luck in pushing developers to downscale titles optimized for PC-based headsets to the Quest and many of the platforms winners have been titles that originally launched on Rift several years ago like Superhot VR.

Oculus has missed out on a small handful of hits that have landed on Steam’s VR storefront instead. The most notable of which was Valve’s recent launch of the heavily-hyped VR title Half Life: Alyx on its own Steam VR store. PlayTracker estimates that Valve has sold upwards of 650,000 copies, a number which could push that title’s revenue near $40 million. The title was compatible with the PC-powered Oculus Rift S, but is not optimized to run on the standalone Quest.

Oculus has recently been rumored to be working on a lighter, smaller version of its Quest headset which it had hoped to launch in late 2020, though that timeline may be pushed back by COVID-19.

Facebook appoints Treasury’s Kimmitt as lead independent board director

Facebook has filled the lead independent board director role with former Deputy Secretary of the Treasury and U.S. Ambassador to Germany Robert M. Kimmitt. His job will be to serve as the go-between connecting Facebook CEO and controlling shareholder Mark Zuckerberg with the rest of the board.

Meanwhile, the CEO of The Cranemere Group Limited Jeffrey D. Zients will not seek re-election to Facebook’s board at the 2020 annual meeting, but will serve until then. Kimmitt replaces Dr. Susan Desmond-Hellmann, who was the former lead independent director but left the board in October.

When Zients departs, the only remaining independent directors besides Kimmitt will be long-time Zuckerberg loyalists and Facebook early investors Marc Andreessen and Peter Thiel. They, Zuckerberg, and Facebook COO Sheryl Sandberg will be the only board members who’ve been on the job more than a year.

“The lead independent director is an important role for us and we’ve been looking for a leader who can bring significant oversight and governance experience” Facebook CEO Mark Zuckerberg announced. “Bob has deep experience working in business, technology and public policy at the highest levels — serving in senior roles at the Treasury, State, and Defense departments under multiple presidents, as US Ambassador to Germany, and on the National Security Council. He has also served as president of a public technology company in Silicon Valley” Zuckerberg wrote.

Before serving with the U.S. Treasury from 2005 to 2009, 72-year-old Kimmitt was on Committee on Foreign Investment in the United States, which has been eying Chinese Facebook competitor TikTok and how it acquired Musically to become a giant in short-form video. The Vietnam combat veteran was a Major General in the Army Reserve. He was also the Under Secretary of State for Political Affairs during the Gulf War.

In the private sector, Ambassador Kimmitt was Executive Vice President of Global Public Policy at Time Warner, President of Commerce One, a partner at Wilmer Cutler & Pickering, and a managing director at Lehman Brothers. He’s now the Senior International Counsel at law firm WilmerHale.

“I am excited to take on this leadership role on Facebook’s board, as the company continues to improve the ways technology and innovation can bring us together” said Kimmitt.

Kimmitt’s appointment comes after several concerning changes to the board recently. Kenneth Chenault left the board at the beginning of the month following his push for Facebook to do more to protect elections, given its refusal to fact-check political ads. Disagreements with Zuckerberg about political policy led to Chenault’s exit.

In February, Zuckerberg’s friend Drew Houston, the co-founder of Dropbox, joined the board in what felt like a chummy appointment. Former White House Chief Of Staff Erskine Bowles and Netflix CEO Reed Hastings left in April 2019.

The board now consists of Zuckerberg, Kimmitt, Zients until the annual meeting, Sandberg, Thiel, Andreessen, Houston, PayPal’s Peggy Alford, McKinsey’s Nancy Killefer, and Estee Lauder’s Tracey T. Travis.

Fewer checks on Zuckerberg’s near-total power could make Facebook more efficient and decisive, but less able to foresee problems that those further removed from its rhetoric might predict.

Watch Mark Zuckerberg talk live with epidemic expert Dr. Anthony Fauci

If there’s one face of scientific authority in the U.S. in the throes of COVID-19 chaos, it’s Dr. Anthony Fauci. One of the world’s top HIV/AIDS researchers, Dr. Fauci has served in his post as director for the National Institute of Allergy and Infectious Diseases since 1984, helping steer the federal response to viral diseases like SARS, MERS, Ebola — and now COVID-19.

Today at 4PM Pacific, Mark Zuckerberg is speaking live with Dr. Fauci to discuss steps that everyday people can take to help fight the spread of COVID-19. To watch the conversation, head over to Zuckerberg’s Facebook page.

Live with Dr. Anthony Fauci, the US’s top infectious disease expert, to learn about what we can all do to fight the spread of the coronavirus (COVID-19).

Posted by Mark Zuckerberg on Thursday, March 19, 2020

The conversation is part of Facebook’s recent thrust to put COVID-19 information from established health authorities front and center on the platform in an effort to get good information into the hands of users while mitigating potentially dangerous misinformation that could worsen outcomes as the novel coronavirus spreads worldwide.

Facebook asks for a moat of regulations it already meets

It’s suspiciously convenient that Facebook already fulfills most of the regulatory requirements it’s asking governments to lay on the rest of the tech industry. Facebook CEO Mark Zuckerberg is in Brussels lobbying the European Union’s regulators as they form new laws to govern artificial intelligence, content moderation, and more. But if they follow Facebook’s suggestions, they might reinforce the social network’s power rather than keep it in check by hamstringing companies with fewer resources.

We already saw this happen with GDPR. The idea was to strengthen privacy and weaken exploitative data collection that tech giants like Facebook and Google depend on for their business models. The result was the Facebook and Google actually gained or only slightly lost EU market share while all other adtech vfendors got wrecked by the regulation, according to WhoTracksMe.

GDPR went into effect in May 2018, hurting other ad tech vendors’ EU market share much worse than Google and Facebook. Image credit: WhoTracksMe

Tech giants like Facebook have the profits lawyers, lobbyists, engineers, designers, scale, and steady cash flow to navigate regulatory changes. Unless new laws are squarely targeted at the abuses or dominance of these large companies, their collateral damage can loom large. Rather than spend time and money they don’t have in order to comply, some smaller competitors will fold, scale back, or sell out.

But at least in the case of GDPR, everyone had to add new transparency and opt out features. If Facebook’s slate of requests goes through, it will sail forward largely unpeturbed while rivals and upstarts scramble to get up to speed. I made this argument in March 2018 in my post “Regulation could protect Facebook, not punish it”. Then GDPR did exactly that.

Google gained market share and Facebook only lost a little in the EU following GDPR. Everyone else faired worse. Image via WhoTracksMe

That doesn’t mean these safeguards aren’t sensible for everyone to follow. But regulators need to consider what Facebook isn’t suggesting if it wants to address its scope and brazenness, and what timelines or penalties would be feasible for smaller players.

If we take a quick look at what Facebook is proposing, it becomes obvious that it’s self-servingly suggesting what it’s already accomplished:

  • User-friendly channels for reporting content – Every post and entity on Facebook can already be flagged by users with an explanation of why
  • External oversight of policies or enforcement – Facebook is finalizing its independent Oversight Board right now
  • Periodic public reporting of enforcement data – Facebook publishes a twice-yearly report about enforcement of its Community Standards
  • Publishing their content standards – Facebook publishes its standards and notes updates to them
  • Consulting with stakeholders when making significant changes – Facebook consults a Safety Advisory Board and will have its new Oversight Board
  • Creating a channel for users to appeal a company’s content removal decisions – Facebook’s Oversight Board will review content removal appeals
  • Incentives to meet specific targets such as keeping the prevalence of violating content below some agreed threshold – Facebook already touts how 99% of child nudity content and 80% of hate speech removed was detected proactively, and that it deletes 99% of ISIS and Al Qaeda content

gettyimages 961424292

Facebook CEO Mark Zuckerberg arrives at the European Parliament, prior to his audition on the data privacy scandal on May 22, 2018 at the European Union headquarters in Brussels. (Photo by JOHN THYS / AFP) (Photo credit should read JOHN THYS/AFP/Getty Images)

Finally, Facebook asks that the rules for what content should be prohibited on the internet “recognize user preferences and the variation among internet services, can be enforced at scale, and allow for flexibility across language, trends and context”. That’s a lot of leeway. Facebook already allows different content in different geographies to comply with local laws, lets Groups self-police themselves more than the News Feed, and Zuckerberg has voiced support for customizable filters on objectionable content with defaults set by local majorities.

“…Can be enforced at scale” is a last push for laws that wouldn’t require tons of human moderators to enforce that might further drag down Facebook’s share price. ‘100 billion piece of content come in per day, so don’t make us look at it all.’ Investments in safety for elections, content, and cybersecurity already dragged Facebook’s profits down from growth of 61% year-over-year in 2019 to just 7% in 2019.

To be clear, it’s great that Facebook is doing any of this already. Little is formally required. If the company was as evil as some make it out to be, it wouldn’t be doing any of this.

Then again, Facebook earned $18 billion in profit in 2019 off our data while repeatedly proving it hasn’t adequately protected it. The $5 billion fine and settlement with FTC where Facebook has pledged to build more around privacy and transparency shows it’s still playing catch up given its role as a ubiquitous communications utility.

There’s plenty more for EU and hopefully US regulators to investigate. Should Facebook pay a tax on the use of AI? How does it treat and pay its human content moderators? Would requiring users be allowed to export their interoperable friends list promote much-needed competition in social networking that could let the market compel Facebook to act better?

As the EU internal market commissioner Thierry Breton told reporters following Zuckerberg’s meetings with regulators, “It’s not for us to adapt to those companies, but for them to adapt to us.”

Facebook pushes EU for dilute and fuzzy Internet content rules

Facebook founder Mark Zuckerberg is in Europe this week — attending a security conference in Germany over the weekend where he spoke about the kind of regulation he’d like applied to his platform ahead of a slate of planned meetings with digital heavyweights at the European Commission.

“I do think that there should be regulation on harmful content,” said Zuckerberg during a Q&A session at the Munich Security Conference, per Reuters, making a pitch for bespoke regulation.

He went on to suggest “there’s a question about which framework you use”, telling delegates: “Right now there are two frameworks that I think people have for existing industries — there’s like newspapers and existing media, and then there’s the telco-type model, which is ‘the data just flows through you’, but you’re not going to hold a telco responsible if someone says something harmful on a phone line.”

“I actually think where we should be is somewhere in between,” he added, making his plea for Internet platforms to be a special case.

At the conference he also said Facebook now employs 35,000 people to review content on its platform and implement security measures — including suspending around 1 million fake accounts per day, a stat he professed himself “proud” of.

The Facebook chief is due to meet with key commissioners covering the digital sphere this week, including competition chief and digital EVP Margrethe Vestager, internal market commissioner Thierry Breton and Věra Jourová, who is leading policymaking around online disinformation.

The timing of his trip is clearly linked to digital policymaking in Brussels — with the Commission due to set out its thinking around the regulation of artificial intelligence this week. (A leaked draft last month suggested policymaker are eyeing risk-based rules to wrap around AI.)

More widely, the Commission is wrestling with how to respond to a range of problematic online content — from terrorism to disinformation and election interference — which also puts Facebook’s 2BN+ social media empire squarely in regulators’ sights.

Another policymaking plan — a forthcoming Digital Service Act (DSA) — is slated to upgrade liability rules around Internet platforms.

The detail of the DSA has yet to be publicly laid out but any move to rethink platform liabilities could present a disruptive risk for a content distributing giant such as Facebook.

Going into meetings with key commissioners Zuckerberg made his preference for being considered a ‘special’ case clear — saying he wants his platform to be regulated not like the media businesses which his empire has financially disrupted; nor like a dumbpipe telco.

On the latter it’s clear — even to Facebook — that the days of Zuckerberg being able to trot out his erstwhile mantra that ‘we’re just a technology platform’, and wash his hands of tricky content stuff, are long gone.

Russia’s 2016 foray into digital campaigning in the US elections and sundry content horrors/scandals before and since have put paid to that — from nation-state backed fake news campaigns to livestreamed suicides and mass murder.

Facebook has been forced to increase its investment in content moderation. Meanwhile it announced a News section launch last year — saying it would hand pick publishers content to show in a dedicated tab.

The ‘we’re just a platform’ line hasn’t been working for years. And EU policymakers are preparing to do something about that.

With regulation looming Facebook is now directing its lobbying energies onto trying to shape a policymaking debate — calling for what it dubs “the ‘right’ regulation”.

Here the Facebook chief looks to be applying a similar playbook as the Google’s CEO, Sundar Pichai — who recently tripped to Brussels to push for AI rules so dilute they’d act as a tech enabler.

In a blog post published today Facebook pulls its latest policy lever: Putting out a white paper which poses a series of questions intended to frame the debate at a key moment of public discussion around digital policymaking.

Top of this list is a push to foreground focus on free speech, with Facebook questioning “how can content regulation best achieve the goal of reducing harmful speech while preserving free expression?” — before suggesting more of the same: (Free, to its business) user-generated policing of its platform.

Another suggestion it sets out which aligns with existing Facebook moves to steer regulation in a direction it’s comfortable with is for an appeals channel to be created for users to appeal content removal or non-removal. Which of course entirely aligns with a content decision review body Facebook is in the process of setting up — but which is not in fact independent of Facebook.

Facebook is also lobbying in the white paper to be able to throw platform levers to meet a threshold of ‘acceptable vileness’ — i.e. it wants a proportion of law-violating content to be sanctioned by regulators — with the tech giant suggesting: “Companies could be incentivized to meet specific targets such as keeping the prevalence of violating content below some agreed threshold.”

It’s also pushing for the fuzziest and most dilute definition of “harmful content” possible. On this Facebook argues that existing (national) speech laws — such as, presumably, Germany’s Network Enforcement Act (aka the NetzDG law) which already covers online hate speech in that market — should not apply to Internet content platforms, as it claims moderating this type of content is “fundamentally different”.

“Governments should create rules to address this complexity — that recognize user preferences and the variation among internet services, can be enforced at scale, and allow for flexibility across language, trends and context,” it writes — lobbying for maximum possible leeway to be baked into the coming rules.

“The development of regulatory solutions should involve not just lawmakers, private companies and civil society, but also those who use online platforms,” Facebook’s VP of content policy, Monika Bickert, also writes in the blog.

“If designed well, new frameworks for regulating harmful content can contribute to the internet’s continued success by articulating clear ways for government, companies, and civil society to share responsibilities and work together. Designed poorly, these efforts risk unintended consequences that might make people less safe online, stifle expression and slow innovation,” she adds, ticking off more of the tech giant’s usual talking points at the point policymakers start discussing putting hard limits on its ad business.

Silicon Valley Community Foundation challenges donors to address local problems

Over the last decade, Silicon Valley Community Foundation has become one of the favorite destinations for tech philanthropy.

Counting Mark Zuckerberg, Jack Dorsey and Reed Hastings among its donors, SVCF has quietly become a philanthropic powerhouse. As a community foundation, it made $126 million in grants in 2018 in San Mateo and Santa Clara counties (the latest year for which numbers were available), but its true power comes from the nearly $9 billion in donor-advised funds (also known as DAFs) it oversees.

DAFs have become popular among wealthy donors in recent years because they carry the tax benefits of a donation without requiring that an immediate donation be made. They also courted controversy, with critics accusing them of being a vehicle for tax sheltering.

Not so, says Nicole Taylor, SVCF’s CEO and president. Appointed a year ago after her predecessor was ousted in scandal, Taylor is working to change the image of DAFs while challenging her donors to take on the Bay Area’s unique challenges, like housing, inequality and transportation. I spoke to Taylor about how the tech sector can do better with its giving.

TechCrunch: Let’s start by explaining how a community foundation works?

Nicole Taylor: Community foundations are a vehicle for people who want to give that come with a far better tax advantage and advising advantage than setting up private foundations [whose] overhead is costly. Most people don’t want to go there; they want a place that helps them with their giving and they want to have that connection back to their local community.

Community foundations were started in the Midwest and are over 100 years old. There are over 800 of us. We serve particular geographic areas. Our core focus [at SVCF] is the Silicon Valley region, the two counties here – Santa Clara and San Mateo.

Zuckerberg ditches annual challenges, but needs cynics to fix 2030

Mark Zuckerberg won’t be spending 2020 focused on wearing ties, learning Mandarin, or just fixing Facebook. “Rather than having year-to-year challenges, I’ve tried to think about what I hope the world and my life will look in 2030” he wrote today on Facebook. As you might have guessed, though, Zuckerberg’s vision for an improved planet involves a lot more of Facebook’s family of apps.

His biggest proclamations in today’s notes include that:

  • AR – Phones will remain the primary computing platform for most of the decade by augmented reality could get devices out from between us so we can be present together — Facebook is building AR glasses
  • VR – Better virtual reality technology could address the housing crisis by letting people work from anywhere — Facebook is building Oculus
  • Privacy – The internet has created a global community where people find it hard to establish themselves as unique, so smaller online groups could make people feel special again – Facebook is building more private groups and messaging options
  • Regulation – That the big questions facing technology are too thorny for private companies to address by themselves, and governments must step in around elections, content moderation, data portability, and privacy — Facebook is trying to self-regulate on these and everywhere else to deter overly onerous lawmaking

Zuckerberg Elections

These are all reasonable predictions and suggestions. However, Zuckerberg’s post does little to address how the broadening of Facebook’s services in the 2010s also contributed to a lot of the problems he presents.

  • Isolation – Constant passive feed scrolling on Facebook and Instagram has created a way to seem like you’re being social without having true back-and-forther interaction with friends
  • Gentrification – Facebook’s shuttled employees have driven up rents in cities around the world, especially the Bay Area
  • Envy – Facebook’s algorithms can make anyone without a glamorous, Instagram-worthy life look less important, while hackers can steal accounts and its moderation systems can accidentally suspend profiles with little recourse for most users
  • Negligence – The growth-first mentality led Facebook’s policies and safety to lag behind its impact, creating the kind of democracy, content, anti-competition, and privacy questions its now asking the government to answer for it

Noticibly absent from Zuckerberg’s post are explicit mentions some of Facebook’s more controversial products and initiatives. He writes about “decentralizing opportunity” by giving small businesses commerce tools, but never mentions cryptocurrency, blockchain, or Libra directly. Instead he seems to suggest that Instagram store fronts, Messenger customer support, and WhatsApp remittance might be sufficient. He also largely leaves out Portal, Facebook’s smart screen that could help distant families stay closer, but that some see as a surveillance and data collection tool.

I’m glad Zuckerberg is taking his role as a public figure and the steward of one of humanity’s fundamental utilities more seriously. His willingness to even think about some of these long-term issues instead of just quarterly-profits is important. Optimism is necessary to create what doesn’t exist.

Still, if Zuckerberg wants 2030 to look better for the world, and for the world to look more kindly on Facebook, he may need to hire more skeptics and cynics that see a dystopic future instead. Their foresight on where societal problems could arise from Facebook’s products could help temper Zuckerberg’s team of idealists to create a company that balances the potential of the future with the risks to the present.

Every new year of the last decade I set a personal challenge. My goal was to grow in new ways outside my day-to-day work…

Posted by Mark Zuckerberg on Thursday, January 9, 2020

Facebook won’t ban political ads, prefers to keep screwing democracy

It’s 2020 — a key election year in the US — and Facebook is doubling down on its policy of letting people pay it to fuck around with democracy.

Despite trenchant criticism — including from US lawmakers accusing Facebook’s CEO to his face of damaging American democracy the company is digging in, announcing as much today by reiterating its defence of continuing to accept money to run microtargeted political ads.

Instead of banning political ads Facebook is trumpeting a few tweaks to the information it lets users see about political ads — claiming it’s boosting “transparency” and “controls” while leaving its users vulnerable to default settings that offer neither.  

Political ads running on Facebook are able to be targeted at individuals’ preferences as a result of the company’s pervasive tracking and profiling of Internet users. And ethical concerns about microtargeting led the UK’s data protection watchdog to call in 2018 for a pause on the use of digital ad tools like Facebook by political campaigns — warning of grave risks to democracy.

Facebook isn’t for pausing political microtargeting, though. Even though various elements of its data-gathering activities are also subject to privacy and consent complaints, regulatory scrutiny and legal challenge in Europe, under regional data protection legislation.

Instead, the company made it clear last fall that it won’t fact-check political ads, nor block political messages that violate its speech policies — thereby giving politicians carte blanche to run hateful lies, if they so choose.

Facebook’s algorithms also demonstrably select for maximum eyeball engagement, making it simply the ‘smart choice’ for the modern digitally campaigning politician to run outrageous BS on Facebook — as long time Facebook exec Andrew Bosworth recently pointed out in an internal posting that leaked in full to the NYT.

Facebook founder Mark Zuckerberg’s defence of his social network’s political ads policy boils down to repeatedly claiming ‘it’s all free speech man’ (we paraphrase).

This is an entirely nuance-free argument that comedian Sacha Baron Cohen expertly demolished last year, pointing out that: “Under this twisted logic if Facebook were around in the 1930s it would have allowed Hitler to post 30-second ads on his solution to the ‘Jewish problem.’”

Facebook responded to the take-down with a denial that hate speech exists on its platform since it has a policy against it — per its typical crisis PR playbook. And it’s more of the same selectively self-serving arguments being dispensed by Facebook today.

In a blog post attributed to its director of product management, Rob Leathern, it expends more than 1,000 words on why it’s still not banning political ads (it would be bad for advertisers wanting to reaching “key audiences”, is the non-specific claim) — including making a diversionary call for regulators to set ad standards, thereby passing the buck on ‘democratic accountability’ to lawmakers (whose electability might very well depend on how many Facebook ads they run…), while spinning cosmetic, made-for-PR tweaks to its ad settings and what’s displayed in an ad archive that most Facebook users will never have heard of as “expanded transparency” and “more control”. 

In fact these tweaks do nothing to reform the fundamental problem of damaging defaults.

The onus remains on Facebook users to do the leg work on understanding what its platform is pushing at their eyeballs and why.

Even as the ‘extra’ info now being drip-fed to the Ad Library is still highly fuzzy (“We are adding ranges for Potential Reach, which is the estimated target audience size for each political, electoral or social issue ad so you can see how many people an advertiser wanted to reach with every ad,” as Facebook writes of one tweak.)

The new controls similarly require users to delve into complex settings menus in order to avail themselves of inherently incremental limits — such as an option that will let people opt into seeing “fewer” political and social issue ads. (Fewer is naturally relative, ergo the scale of the reduction remains entirely within Facebook’s control — so it’s more meaningless ‘control theatre’ from the lord of dark pattern design. Why can’t people switch off political and issue ads entirely?)

Another incremental setting lets users “stop seeing ads based on an advertiser’s Custom Audience from a list”.

But just imagine trying to explain WTF that means to your parents or grandparents — let alone an average Internet user actually being able to track down the ‘control’ and exercise any meaningful agency over the political junk ads they’re being exposed to on Facebook.

It is, to quote Baron Cohen, “bullshit”.

Nor are outsiders the only ones calling out Zuckerberg on his BS and “twisted logic”: A number of Facebook’s own employees warned in an open letter last year that allowing politicians to lie in Facebook ads essentially weaponizes the platform.

They also argued that the platform’s advanced targeting and behavioral tracking tools make it “hard for people in the electorate to participate in the public scrutiny that we’re saying comes along with political speech” — accusing the company’s leadership of making disingenuous arguments in defence of a toxic, anti-democratic policy. 

Nothing in what Facebook has announced today resets the anti-democratic asymmetry inherent in the platform’s relationship to its users.

Facebook users — and democratic societies — remain, by default, preyed upon by self-interested political interests thanks to Facebook’s policies which are dressed up in a self-interested misappropriation of ‘free speech’ as a cloak for its unfettered exploitation of individual attention as fuel for a propaganda-as-service business.

Yet other policy positions are available.

Twitter announced a total ban on political ads last year — and while the move doesn’t resolve wider disinformation issues attached to its platform, the decision to bar political ads has been widely lauded as a positive, standard-setting example.

Google also followed suit by announcing a ban on “demonstrably false claims” in political ads. It also put limits on the targeting terms that can be used for political advertising buys that appear in search, on display ads and on YouTube.

Still Facebook prefers to exploit “the absence of regulation”, as its blog post puts it, to not do the right thing and keep sticking two fingers up at democratic accountability — because not applying limits on behavioral advertising best serves its business interests. Screw democracy.

“We have based [our policies] on the principle that people should be able to hear from those who wish to lead them, warts and all, and that what they say should be scrutinized and debated in public,” Facebook writes, ignoring the fact that some of its own staff already pointed out the sketchy hypocrisy of trying to claim that complex ad targeting tools and techniques are open to public scrutiny.

Will online privacy make a comeback in 2020?

Last year was a landmark for online privacy in many ways, with something of a consensus emerging that consumers deserve protection from the companies that sell their attention and behavior for profit.

The debate now is largely around how to regulate platforms, not whether it needs to happen.

The consensus among key legislators acknowledges that privacy is not just of benefit to individuals but can be likened to public health; a level of protection afforded to each of us helps inoculate democratic societies from manipulation by vested and vicious interests.

The fact that human rights are being systematically abused at population-scale because of the pervasive profiling of Internet users — a surveillance business that’s dominated in the West by tech giants Facebook and Google, and the adtech and data broker industry which works to feed them — was the subject of an Amnesty International report in November 2019 that urges legislators to take a human rights-based approach to setting rules for Internet companies.

“It is now evident that the era of self-regulation in the tech sector is coming to an end,” the charity predicted.

Democracy disrupted

The dystopian outgrowth of surveillance capitalism was certainly in awful evidence in 2019, with elections around the world attacked at cheap scale by malicious propaganda that relies on adtech platforms’ targeting tools to hijack and skew public debate, while the chaos agents themselves are shielded from democratic view.

Platform algorithms are also still encouraging Internet eyeballs towards polarized and extremist views by feeding a radicalized, data-driven diet that panders to prejudices in the name of maintaining engagement — despite plenty of raised voices calling out the programmed antisocial behavior. So what tweaks there have been still look like fiddling round the edges of an existential problem.

Worse still, vulnerable groups remain at the mercy of online hate speech which platforms not only can’t (or won’t) weed out, but whose algorithms often seem to deliberately choose to amplify — the technology itself being complicit in whipping up violence against minorities. It’s social division as a profit-turning service.

The outrage-loving tilt of these attention-hogging adtech giants has also continued directly influencing political campaigning in the West this year — with cynical attempts to steal votes by shamelessly platforming and amplifying misinformation.

From the Trump tweet-bomb we now see full-blown digital disops underpinning entire election campaigns, such as the UK Conservative Party’s strategy in the 2019 winter General Election, which featured doctored videos seeded to social media and keyword targeted attack ads pointing to outright online fakes in a bid to hack voters’ opinions.

Political microtargeting divides the electorate as a strategy to conquer the poll. The problem is it’s inherently anti-democratic.

No wonder, then, that repeat calls to beef up digital campaigning rules and properly protect voters’ data have so far fallen on deaf ears. The political parties all have their hands in the voter data cookie-jar. Yet it’s elected politicians whom we rely upon to update the law. This remains a grave problem for democracies going into 2020 — and a looming U.S. presidential election.

So it’s been a year when, even with rising awareness of the societal cost of letting platforms suck up everyone’s data and repurpose it to sell population-scale manipulation, not much has actually changed. Certainly not enough.

Yet looking ahead there are signs the writing is on the wall for the ‘data industrial complex’ — or at least that change is coming. Privacy can make a comeback.

Adtech under attack

Developments in late 2019 such as Twitter banning all political ads and Google shrinking how political advertisers can microtarget Internet users are notable steps — even as they don’t go far enough.

But it’s also a relatively short hop from banning microtargeting sometimes to banning profiling for ad targeting entirely.

Alternative online ad models (contextual targeting) are proven and profitable — just ask search engine DuckDuckGo . While the ad industry gospel that only behavioral targeting will do now has academic critics who suggest it offer far less uplift than claimed, even as — in Europe — scores of data protection complaints underline the high individual cost of maintaining the status quo.

Startups are also innovating in the pro-privacy adtech space (see, for example, the Brave browser).

Changing the system — turning the adtech tanker — will take huge effort, but there is a growing opportunity for just such systemic change.

This year, it might be too much to hope for regulators get their act together enough to outlaw consent-less profiling of Internet users entirely. But it may be that those who have sought to proclaim ‘privacy is dead’ will find their unchecked data gathering facing death by a thousand regulatory cuts.

Or, tech giants like Facebook and Google may simple outrun the regulators by reengineering their platforms to cloak vast personal data empires with end-to-end encryption, making it harder for outsiders to regulate them, even as they retain enough of a fix on the metadata to stay in the surveillance business. Fixing that would likely require much more radical regulatory intervention.

European regulators are, whether they like it or not, in this race and under major pressure to enforce the bloc’s existing data protection framework. It seems likely to ding some current-gen digital tracking and targeting practices. And depending on how key decisions on a number of strategic GDPR complaints go, 2020 could see an unpicking — great or otherwise — of components of adtech’s dysfunctional ‘norm’.

Among the technologies under investigation in the region is real-time bidding; a system that powers a large chunk of programmatic digital advertising.

The complaint here is it breaches the bloc’s General Data Protection Regulation (GDPR) because it’s inherently insecure to broadcast granular personal data to scores of entities involved in the bidding chain.

A recent event held by the UK’s data watchdog confirmed plenty of troubling findings. Google responded by removing some information from bid requests — though critics say it does not go far enough. Nothing short of removing personal data entirely will do in their view, which sums to ads that are contextually (not micro)targeted.

Powers that EU data protection watchdogs have at their disposal to deal with violations include not just big fines but data processing orders — which means corrective relief could be coming to take chunks out of data-dependent business models.

As noted above, the adtech industry has already been put on watch this year over current practices, even as it was given a generous half-year grace period to adapt.

In the event it seems likely that turning the ship will take longer. But the message is clear: change is coming. The UK watchdog is due to publish another report in 2020, based on its review of the sector. Expect that to further dial up the pressure on adtech.

Web browsers have also been doing their bit by baking in more tracker blocking by default. And this summer Marketing Land proclaimed the third party cookie dead — asking what’s next?

Alternatives and workarounds will and are springing up (such as stuffing more in via first party cookies). But the notion of tracking by background default is under attack if not quite yet coming unstuck.

Ireland’s DPC is also progressing on a formal investigation of Google’s online Ad Exchange. Further real-time bidding complaints have been lodged across the EU too. This is an issue that won’t be going away soon, however much the adtech industry might wish it.

Year of the GDPR banhammer?

2020 is the year that privacy advocates are really hoping that Europe will bring down the hammer of regulatory enforcement. Thousands of complaints have been filed since the GDPR came into force but precious few decisions have been handed down. Next year looks set to be decisive — even potentially make or break for the data protection regime.