Planning for the uncertain future of work

In a recently published, roughly 75-page report, British non-profit organization The Royal Society for the Encouragement of Arts (RSA) outlined several scenarios for how the UK labor market will be impacted by frontier technologies such as automation, AI, AVs and more.

The analysis titled “The Four Futures of Work” was conducted in collaboration with design and consulting firm Arup and was spearheaded by the RSA’s “Future Work Centre”, which focuses on the impact of new technologies on work and is backed by law firm Taylor Wessing, the Friends Provident Foundation, Google’s philanthropic arm Google.org and others.

The report is less of a traditional research paper and more of a qualitative, theoretical and abstract exploration of how the world might look depending on how certain technological and sociological variables (immigration, political will, etc.) develop. The authors don’t try to estimate growth paths for new technologies nor do they try to reach a definitive conclusion on what the future of work will look like. The work instead looks to lay out multiple possible outcomes in order to help citizens prepare for transformations in labor and to derive policy recommendations to mitigate externalities in each scenario.

As opposed to traditional quantitative data-based methodologies, research was conducted using “morphological scenario analysis.” The authors’ worked with technologists, industry executives and academic researchers to identify the technological and non-technological uncertainties that will have a critical impact on the future of work, before projecting three (minimal impact, moderate impact, and severe impact) possible scenarios of how each will look by the year 2035. With input from the report’s collaborators, the researchers then chose the four most compelling and sensical scenarios for how the future of work look.

The value of the report depends entirely on how readers intend to use it. If one hopes to gauge market sizes or inform forecasts or is looking for scientific, quantitative research with data — they should not read this. The report is more useful as a way to understand the different ways new technologies may evolve through thought-provoking, fun-yet-probabilistic, and poetic narratives of hypothetical future economic structures and how they might function.

Rather than summarize the four detailed scenarios in the report and all the conclusions discussed, which can be found in the executive summary or full report, here are a few takeaways and the most interesting highlights in our view:

The underwhelming:

Facebook staff raised concerns about Cambridge Analytica in September 2015, per court filing

Further details have emerged about when and how much Facebook knew about data-scraping by the disgraced and now defunct Cambridge Analytica political data firm.

Last year a major privacy scandal hit Facebook after it emerged CA had paid GSR, a developer with access to Facebook’s platform, to extract personal data on as many as 87M Facebook users without proper consents.

Cambridge Analytica’s intention was to use the data to build psychographic profiles of American voters to target political messages — with the company initially working for the Ted Cruz and later the Donald Trump presidential candidate campaigns.

But employees at Facebook appear to have raised internal concerns about CA scraping user data in September 2015 — i.e. months earlier than Facebook previously told lawmakers it became aware of the GSR/CA breach (December 2015).

The latest twist in the privacy scandal has emerged via a redacted court filing in the U.S. — where the District of Columbia is suing Facebook in a consumer protection enforcement case.

Facebook is seeking to have documents pertaining to the case sealed, while the District argues there is nothing commercially sensitive to require that.

In its opposition to Facebook’s motion to seal the document, the District includes a redacted summary (screengrabbed below) of the “jurisdictional facts” it says are contained in the papers Facebook is seeking to keep secret.

According to the District’s account a Washington D.C.-based Facebook employee warned others in the company about Cambridge Analytica’s data-scraping practices as early as September 2015.

Under questioning in Congress last April, Mark Zuckerberg was asked directly by congressman Mike Doyle when Facebook had first learned about Cambridge Analytica using Facebook data — and whether specifically it had learned about it as a result of the December 2015 Guardian article (which broke the story).

Zuckerberg responded with a “yes” to Doyle’s question.

Facebook repeated the same line to the UK’s Digital, Media and Sport (DCMA) committee last year, over a series of hearings with less senior staffers

Damian Collins, the chair of the DCMS committee — which made repeat requests for Zuckerberg himself to testify in front of its enquiry into online disinformation, only to be repeatedly rebuffed — tweeted yesterday that the new detail could suggest Facebook “consistently mislead” the British parliament.

The DCMS committee has previously accused Facebook of deliberately misleading its enquiry on other aspects of the CA saga, with Collins taking the company to task for displaying a pattern of evasive behavior.

The earlier charge that it mislead the committee refers to a hearing in Washington in February 2018 — when Facebook sent its UK head of policy, Simon Milner, and its head of global policy management, Monika Bickert, to field DCMS’ questions — where the pair failed to inform the committee about a legal agreement Facebook had made with Cambridge Analytica in December 2015.

The committee’s final report was also damning of Facebook, calling for regulators to instigate antitrust and privacy probes of the tech giant.

Meanwhile, questions have continued to be raised about Facebook’s decision to hire GSR co-founder Joseph Chancellor, who reportedly joined the company around November 2015.

The question now is if Facebook knew there were concerns about CA data-scraping prior to hiring the co-founder of the company that sold scraped Facebook user data to CA, why did it go ahead and hire Chancellor?

The GSR co-founder has never been made available by Facebook to answer questions from politicians (or press) on either side of the pond.

Last fall he was reported to have quietly left Facebook, with no comment from Facebook on the reasons behind his departure — just as it had never explained why it hired him in the first place.

But the new timeline that’s emerged of what Facebook knew when makes those questions more pressing than ever.

Reached for a response to the details contained in the District of Columbia’s court filing, a Facebook spokeswomen sent us this statement:

Facebook was not aware of the transfer of data from Kogan/GSR to Cambridge Analytica until December 2015, as we have testified under oath

In September 2015 employees heard speculation that Cambridge Analytica was scraping data, something that is unfortunately common for any internet service. In December 2015, we first learned through media reports that Kogan sold data to Cambridge Analytica, and we took action. Those were two different things.

Facebook did not engage with questions about any of the details and allegations in the court filing.

A little later in the court filing, the District of Columbia writes that the documents Facebook is seeking to seal are “consistent” with its allegations that “Facebook has employees embedded within multiple presidential candidate campaigns who… knew, or should have known… [that] Cambridge Analytica [was] using the Facebook consumer data harvested by [[GSR’s]] [Aleksandr] Kogan throughout the 2016 [United States presidential] election.”

It goes on to suggest that Facebook’s concern to seal the document is “reputational”, suggesting — in another redacted segment (below) — that it might “reflect poorly” on Facebook that a DC-based employee had flagged Cambridge Analytica months prior to news reports of its improper access to user data.

“The company may also seek to avoid publishing its employees’ candid assessments of how multiple third-parties violated Facebook’s policies,” it adds, chiming with arguments made last year by GSR’s Kogan who suggested the company failed to enforce the terms of its developer policy, telling the DCMS committee it therefore didn’t have a “valid” policy.

As we’ve reported previously, the UK’s data protection watchdog — which has an ongoing investigation into CA’s use of Facebook data — was passed information by Facebook as part of that probe which showed that three “senior managers” had been involved in email exchanges, prior to December 2015, concerning the CA breach.

It’s not clear whether these exchanges are the same correspondence the District of Columbia has obtained and which Facebook is seeking to seal. Or whether there were multiple email threads raising concerns about the company.

The ICO passed the correspondence it obtained from Facebook to the DCMS committee — which last month said it had agreed at the request of the watchdog to keep the names of the managers confidential. (The ICO also declined to disclose the names or the correspondence when we made a Freedom of Information request last month — citing rules against disclosing personal data and its ongoing investigation into CA meaning the risk of release might be prejudicial to its investigation.)

In its final report the committee said this internal correspondence indicated “profound failure of governance within Facebook” — writing:

[I]t would seem that this important information was not shared with the most senior executives at Facebook, leading us to ask why this was the case. The scale and importance of the GSR/Cambridge Analytica breach was such that its occurrence should have been referred to Mark Zuckerberg as its CEO immediately. The fact that it was not is evidence that Facebook did not treat the breach with the seriousness it merited. It was a profound failure of governance within Facebook that its CEO did not know what was going on, the company now maintains, until the issue became public to us all in 2018. The incident displays the fundamental weakness of Facebook in managing its responsibilities to the people whose data is used for its own commercial interests.

We reached out to the ICO for comment on the information to emerge via the Columbia suit, and also to the Irish Data Protection Commission, the lead DPA for Facebook’s international business, which currently has 15 open investigations into Facebook or Facebook-owned businesses related to various security, privacy and data protection issues.

An ICO spokesperson told us: “We are aware of these reports and will be considering the points made as part of our ongoing investigation.”

Last year the ICO issued Facebook with the maximum possible fine under UK law for the CA data breach.

Shortly after Facebook announced it would appeal, saying the watchdog had not found evidence that any UK users’ data was misused by CA.

A date for the hearing of the appeal set for earlier this week was canceled without explanation. A spokeswoman for the tribunal court told us a new date would appear on its website in due course.

This report was updated with comment from the ICO

Tech regulation in Europe will only get tougher

European governments have been bringing the hammer down on tech in recent months, slapping record fines and stiff regulations on the largest imports out of Silicon Valley. Despite pleas from the world’s leading companies and Europe’s eroding trust in government, European citizens’ staunch support for regulation of new technologies points to an operating environment that is only getting tougher.

According to a roughly 25-page report recently published by a research arm out of Spain’s IE University, European citizens remain skeptical of tech disruption and want to handle their operators with kid gloves, even at a cost to the economy.

The survey was led by the IE’s Center for the Governance of Change — an IE-hosted research institution focused on studying “the political, economic, and societal implications of the current technological revolution and advances solutions to overcome its unwanted effects.” The “European Tech Insights 2019” report surveyed roughly 2,600 adults from various demographics across seven countries (France, Germany, Ireland, Italy, Spain, The Netherlands, and the UK) to gauge ground-level opinions on ongoing tech disruption and how government should deal with it.

The report does its fair share of fear-mongering and some of its major conclusions come across as a bit more “clickbaity” than insightful. However, the survey’s more nuanced data and line of questioning around specific forms of regulation offer detailed insight into how the regulatory backdrop and operating environment for European tech may ultimately evolve.

 

Distractions

Paris to tax scooter and bike services

According to the City of Paris, there are 15,000 free-floating vehicles of all forms and shapes in the city, from electric scooters to fluorescent bikes and motorcycle-like scooters. And the City of Paris announced today that companies that operate free-floating services will have to pay a tax depending on the size of their fleet.

If the plan goes through and if you’re running a bike-sharing service, you’ll have to pay €20 per bike per year. For scooter companies, they’ll pay €50 per scooter per year. Motorcycle scooters will be taxed €60 per scooter per year.

According to Le Parisien, it will be a tier system. Every time you go over the basic tier, you’ll have to pay more. Companies will pay 10 percent more for vehicle No. 500 to vehicle No. 999, 20 percent more for vehicle No. 1,000 to vehicle No. 2,999, and 30 percent more for any vehicle after No. 3,000.

Paris is a tiny city — it’s smaller than San Francisco when it comes to geographical footprint. And it’s also impossible to park a car and drive in Paris. That’s why a vast majority of people who live in Paris don’t own a car. It’s simply much faster and cheaper to use the subway or other transportation methods.

That’s why bikes, scooters and motorcycle scooters are thriving. Having fewer cars on the road is a great thing, but it has created some unexpected challenges.

Bike-sharing services thrived when the city’s bike-sharing system was more or less useless during a network upgrade. GoBee Bike, oBike, Ofo and Mobike all launched their services in the streets of Paris. But they’ve all failed. GoBee Bike shut down, Ofo still has a few bikes but no team, Mobike is scaling back international operations…

That was a bad start for free-floating services, as many broken bikes are littering the streets of Paris. The dock-based bike-sharing system Vélib is now working, fine with more than 1,200 stations and tens of thousands of rides per day — you basically see them everywhere.

On the scooter front, there are now nine companies operating in Paris. Yes, you read that number correctly. They all have funny-sounding names too — Lime, Bird, Bolt, Wind, Tier, Voi, Flash, Hive and Dott.

They’re quite popular because there are a ton of bike lanes in Paris. Most people still don’t wear helmets and there are a lot of injuries — but that’s another issue.

Like many other cities, many people complain about scooters crowding the sidewalk. If you’re in a wheelchair, pushing a stroller or if you’re visually impaired, navigating the sidewalk can be difficult these days.

The City of Paris wants to make those companies accountable. They need to take care of their fleets in order to maximize the number of scooters that actually work and remove the broken scooters. And I’m sure there will be some consolidation and bankruptcies in the space.

When it comes to motorcycle scooters, Cityscoot and Coup have been putting more scooters on the road. There’s no reason they would be excluded from the tax. Sometimes, they are cluttering bike parking space, for instance:

Let’s see if that strategy works to avoid a dumping strategy. Free-floating services have a huge impact on the environment. Scooters only last a few weeks before they need to be replaced. The solution isn’t to throw more scooters at the problem.

Slowdown or not, China’s luxury goods still seeing high-end growth

Despite well-documented concerns over an economic slowdown in China, the country’s luxury goods market is still seeing opulent growth according to a new study. Behind secular and demographic tailwinds, the luxury sector is set to continue its torrid expansion in the face of volatility as it’s quickly becoming a defensive economic crown jewel.

Using proprietary analysis, company data, primary source interviews, and third-party research, Bain & Company dug into the ongoing expansion of China’s high-end market in a report titled “What’s Powering China’s Market for Luxury Goods?

In recent years, China has become one of the largest markets for luxury good companies globally. And while many have raised concern around a drop-off in luxury demand, findings in the report point to the contrary, with Bain forecasting material growth throughout 2019 and beyond. The analysis provides a compelling breakdown of how the sector has seen and will see continued development, as well as a fascinating examination of what strategies separate winners and losers in the space.

The report is worth a quick read, as it manages to provide several insightful and differentiated data points with relative brevity, but here are the most interesting highlights in our view:

Google fined $1.49BN in Europe for antitrust violations in search ad brokering

The European Commission has just announced another antitrust fine for Google .

The latest fine — $1.49BN — relates to its search ad brokering business which competition commissioner Margrethe Vestager noted today is “by far” the company’s main source of revenue.

“Today’s decision is about how Google abused its domiance to stop website’s using broker’s other than the AdSense platform,” she said, noting that the Commission looked at more than 200 agreements and found at least one clause that harmed competition.

“There was no reason for Google to include these restrictive clauses in its contracts other than to keep rivals out of the market,” she added.

The Commission found three types of anti-competitive restriction in Google’s contracts — including the company requiring its ads to have premium placement.

We’ve reached out to Google for comment.

This story is developing… refresh for updates

It’s the third Commission antitrust penalty for Google, following the $5BN fine for anti-competitive behaviors attached to Android last summer and a $2.7BN penalty for Google Shopping antitrust violations in mid 2017.

In recent years Vestager has also flagged concerns about several other Google products, including travel search, image search and maps. Though no formal probes have yet been announced.

The latest EU antitrust decision against Google relates specifically to Google AdSense ads that appear on third party sites as a result of a search made on those sites.

The Commission made a formal Statement of Objections against AdSense in 2016, when it identified several practices it believed violated antitrust rules after investigating complaints.

Its objections included that Google required exclusivity in AdSense site search deals, mandating that third parties do not source search ads from its competitors; that Google required third parties to take a minimum number of search ads from it, with premium placement for them; and that Google required sites to seek approval from it before making any changes that might involve competing ads.

The Commission noted at the time that exclusivity practices had been in place since 2006, before being gradually replaced by Google from 2009 in most contracts — with the requirement of premium placement/minimum ads and the right for Google to authorise competing ads.

“The Commission is concerned that the practices have artificially reduced choice and stifled innovation in the market throughout the period,” it wrote then. “They have artificially reduced the opportunities for Google’s competitors on this commercially important market, and therefore the ability of third party websites to invest in providing consumers with choice and innovative services.”

You can read more on the background to the AdSense complaint (and Google Shopping) in our report from 2016 here.

Since being hit with a wave of antitrust scrutiny and action in Europe Google has been forced to tweak product and make some changes to its business practices. Though it’s far from clear it’s done enough to stave off further regulatory intervention if the end-goal is to promote effective competition.

Google’s latest Android tweaks — announced just yesterday — attempt to address complaints that its default browser and search settings on the smartphone platform box out competition by preferring its own browser over rival browsers.

In a blog post dated March 19 Google said it will start asking Android users to choose which browser and search apps they wish to use, with the change slated as coming in the next months.

Last fall it also made changes to the licensing terms of Android to allow device makers to unbundle its apps — for a fee.

While in fall 2017 Google tweaked how it displays search results for products in Europe.

Although it was later accused of creating a ‘fake’ price comparison site scheme to create the allusion of a thriving market.

In all these EU antitrust cases complaints against Google have not gone away.

Rather complainants continue to couch the company’s self-styled compliance ‘remedies’ as a joke.

Yet with antitrust and political scrutiny of Google and other tech giants stepping up domestically as well as internationally, any self-serving competition ‘fixes’ are operating on borrowed time.

Moreover figleafs will likely increase pressure for more radical regulatory intervention — such as a break up of Google…

It’s therefore likely no coincidence that — in a more recent browser-related update — the search giant quietly expanded search engine choices in Chrome, adding privacy-focused rival DuckDuckGo’s search engine to the lists of options it promotes to users in more than 60 markets with the latest Chromium stable release, as well as French pro-privacy Qwant as an option in its home market.

This change was welcomed by both DuckDuckGo and Qwant.

Though the latter told us it still recommends its users use Firefox or Brave, rather than Google’s Chrome browser.

Ahead of third antitrust ruling, Google announces fresh tweaks to Android in Europe

Google is widely expected to be handed a third antitrust fine in Europe this week, with reports suggesting the European Commission’s decision in its long-running investigation of AdSense could land later today.

Right on cue the search giant has PRed another Android product tweak — which it bills as “supporting choice and competition in Europe”.

In the coming months Google says it will start prompting users of existing and new Android devices in Europe to ask which browser and search apps they would like to use.

This follows licensing changes for Android in Europe which Google announced last fall, following the Commission’s $5BN antitrust fine for anti-competitive behavior related to how it operates the dominant smartphone OS.

tl;dr competition regulation can shift policy and product.

Albeit, the devil will be in the detail of Google’s self-imposed ‘remedy’ for Android browser and search apps.

Which means how exactly the user is prompted will be key — given tech giants are well-versed in the manipulative arts of dark pattern design, enabling them to create ‘consent’ flows that deliver their desired outcome.

A ‘choice’ designed in such a way — based on wording, button/text size and color, timing of prompt and so on — to promote Google’s preferred browser and search app choice by subtly encouraging Android users to stick with its default apps may not actually end up being much of a ‘choice’.

According to Reuters the prompt will surface to Android users via the Play Store. (Though the version of Google’s blog post we read did not include that detail.)

Using the Play Store for the prompt would require an Android device to have Google’s app store pre-loaded — and licensing tweaks made to the OS in Europe last year were supposedly intended to enable OEMs to choose to unbundle Google apps from Android forks. Ergo making only the Play Store the route for enabling choice would be rather contradictory. (As well as spotlighting Google’s continued grip on Android.)

Add to that Google has the advantage of massive brand dominance here, thanks to its kingpin position in search, browsers and smartphone platforms.

So again the consumer decision is weighted in its favor. Or, to put it another way: ‘This is Google; it can afford to offer a ‘choice’.’

In its blog post getting out ahead of the Commission’s looming AdSense ruling, Google’s SVP of global affairs, Kent Walker, writes that the company has been “listening carefully to the feedback we’re getting” vis-a-vis competition.

Though the search giant is actually appealing both antitrust decisions. (The other being a $2.7BN fine it got slapped with two years ago for promoting its own shopping comparison service and demoting rivals’.)

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search,” Walker continues. “In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app.”

Other opinions are available on those changes too.

Such as French pro-privacy Google search rival Qwant, which last year told us how those licensing changes still make it essentially impossible for smartphone makers to profit off of devices that don’t bake in Google apps by default. (More recently Qwant’s founder condensed the situation to “it’s a joke“.)

Qwant and another European startup Jolla, which leads development of an Android alternative smartphone platform called Sailfish — and is also a competition complainant against Google in Europe — want regulators to step in and do more.

The Commission has said it is closely monitoring changes made by Google to determine whether or not the company has complied with its orders to stop anti-competitive behavior.

So the jury is still out on whether any of its tweaks sum to compliance. (Google says so but that’s as you’d expect — and certainly doesn’t mean the Commission will agree.)

In its Android decision last summer the Commission judged that Google’s practices harmed competition and “further innovation” in the wider mobile space, i.e. beyond Internet search — because it prevented other mobile browsers from competing effectively with its pre-installed Chrome browser.

So browser choice is a key component here. And ‘effective competition’ is the bar Google’s homebrew ‘remedies’ will have to meet.

Still, the company will be hoping its latest Android tweaks steer off further Commission antitrust action. Or at least generate more fuzz and fuel for its long-game legal appeal.

Current EU competition commissioner, Margrethe Vestager, has flagged for years that the division is also fielding complaints about other Google products, including travel search, image search and maps. Which suggests Google could face fresh antitrust investigations in future, even as the last of the first batch is about to wrap up.

The FT reports that Android users in the European economic area last week started seeing links to rival websites appearing above Google’s answer box for searches for products, jobs or businesses — with the rival links appearing above paid results links to Google’s own services.

The newspaper points out that tweak is similar to a change promoted by Google in 2013, when it was trying to resolve EU antitrust concerns under the prior commissioner, Joaquín Almunia.

However rivals at the time complained the tweak was insufficient. The Commission subsequently agreed — and under Vestager’s tenure went on to hit Google with antitrust fines.

Walker doesn’t mention these any of additional antitrust complaints swirling around Google’s business in Europe, choosing to focus on highlighting changes it’s made in response to the two extant Commission antitrust rulings.

“After the Commission’s July 2018 decision, we changed the licensing model for the Google apps we build for use on Android phones, creating new, separate licenses for Google Play, the Google Chrome browser, and for Google Search. In doing so, we maintained the freedom for phone makers to install any alternative app alongside a Google app,” he writes.

Nor does he make mention of a recent change Google quietly made to the lists of default search engine choices in its Chrome browser — which expanded the “choice” he claims the company offers by surfacing more rivals. (The biggest beneficiary of that tweak is privacy search rival DuckDuckGo, which suddenly got added to the Chrome search engine lists in around 60 markets. Qwant also got added as a default choice in France.)

Talking about Android specifically Walker instead takes a subtle indirect swipe at iOS maker Apple — which now finds itself the target of competition complaints in Europe, via music streaming rival Spotify, and is potentially facing a Commission probe of its own (albeit, iOS’ marketshare in Europe is tiny vs Android). So top deflecting Google.

“On Android phones, you’ve always been able to install any search engine or browser you want, irrespective of what came pre-installed on the phone when you bought it. In fact, a typical Android phone user will usually install around 50 additional apps on their phone,” Walker writes, drawing attention to the fact that Apple does not offer iOS users as much of a literal choice as Google does.

“Now we’ll also do more to ensure that Android phone owners know about the wide choice of browsers and search engines available to download to their phones,” he adds, saying: “This will involve asking users of existing and new Android devices in Europe which browser and search apps they would like to use.”

We’ve reached out to Commission for comment, and to Google with questions about the design of its incoming browser and search app prompts for Android users in Europe and will update this report with any response.

Facebook settles ACLU job advertisement discrimination suit

Facebook and the ACLU issued a joint statement this morning, noting that they have settled a class action job discrimination suit. The ACLU filed the suit in September, along with Outten & Golden LLC and the Communications Workers of America, alleging that Facebook allowed employers to target ads based on categories like race, national origin, age and gender.

The initial charges were filed on behalf of female workers who alleged they were not served up employment opportunities based on gender. Obviously all of that’s against all sort of federal, state and local laws, including, notably, section VII of the Civil Rights Act of 1964.

Today’s announcement finds Facebook implementing “sweeping changes” to its advertising platform in order to address these substantial concerns. The company outlined a laundry list of “far-reaching changes and steps,” including the development of a separate ad portal to handle topics like housing, employment and credit (HEC) for Facebook, Instagram and Facebook Messenger.

Targeting based on gender, age and race will not be allowed within the confines of the new system. Ditto for the company’s Lookalike Audience tool, which is similarly designed to target customers based on things like gender, age, religious views and the like.

“Civil rights leaders and experts – including members of the Congressional Black Caucus, the Congressional Hispanic Caucus, the Congressional Asian Pacific American Caucus, and Laura Murphy, the highly respected civil rights leader who is overseeing the Facebook civil rights audit – have also raised valid concerns about this issue,” Sheryl Sandberg wrote in a blog post tied to the announcement. “We take their concerns seriously and, as part of our civil rights audit, engaged the noted civil rights law firm Relman, Dane & Colfax to review our ads tools and help us understand what more we could do to guard against misuse.”

In addition to the above portal, Facebook will be creating a one-stop site where users can search amongst all job listings, independent of how ads are served up. The company has also promised to offer up “educational materials to advertisers about these new anti-discrimination measures. Facebook will also be meeting regularly with the suit’s plaintiffs to assure that it is continuing to meet all of the parameters of the settlement.

“As the internet — and platforms like Facebook — play an increasing role in connecting us all to information related to economic opportunities, it’s crucial that micro-targeting not be used to exclude groups that already face discrimination,” ACLU senior staff attorney Galen Sherwin said in the joint statement. “We are pleased Facebook has agreed to take meaningful steps to ensure that discriminatory advertising practices are not given new life in the digital era, and we expect other tech companies to follow Facebook’s lead.”

Further details of the settlement haven’t been disclosed by either party, but the update is clearly a bit of a consolatory move from a company that’s landed itself on the wrong side of a large lawsuit. Even so, it ought to be regarded as a positive outcome for a problematic product offering.

Snap is under NDA with UK Home Office discussing how to centralize age checks online

Snap is under NDA with the UK’s Home Office as part of a working group tasked with coming up with more robust age verification technology that’s able to robustly identify children online.

The detail emerged during a parliamentary committee hearing as MPs in the Department for Digital, Culture, Media and Sport (DCMS) questioned Stephen Collins, Snap’s senior director for public policy international, and Will Scougal, director of creative strategy EMEA.

A spokesman in the Home Office press office hadn’t immediately heard of any discussions with the messaging company on the topic of age verification. But we’ll update this story with any additional context on the department’s plans if more info is forthcoming.

Under questioning by the committee Snap conceded its current age verification systems are not able to prevent under 13 year olds from signing up to use its messaging platform.

The DCMS committee’s interest here is it’s running an enquiry into immersive and addictive technologies.

Snap admitted that the most popular means of signing up to its app (i.e. on mobile) is where its age verification system is weakest, with Collins saying it had no ability to drop a cookie to keep track of mobile users to try to prevent repeat attempts to get around its age gate.

But he emphasized Snap does not want underage users on its platform.

“That brings us no advantage, that brings us no commercial benefit at all,” he said. “We want to make it an enjoyable place for everybody using the platform.”

He also said Snap analyzes patterns of user behavior to try to identify underage users — investigating accounts and banning those which are “clearly” determined not to be old enough to use the service.

But he conceded there’s currently “no foolproof way” to prevent under 13s from signing up.

Discussing alternative approaches to verifying kids’ age online the Snap policy staffer agreed parental consent approaches are trivially easy for children to circumvent — such as by setting up spoof email accounts or taking a photo of a parent’s passport or credit card to use for verification.

Social media company Facebook is one such company that relies a ‘parental consent’ system to ‘verify’ the age of teen users — though, as we’ve previously reported, it’s trivially easy for kids to workaround.

“I think the most sustainable solution will be some kind of central verification system,” Collins suggested, adding that such a system is “already being discussed” by government ministers.

“The home secretary has tasked the Home Office and related agencies to look into this — we’re part of that working group,” he continued.

“We actually met just yesterday. I can’t give you the details here because I’m under an NDA,” Collins added, suggesting Snap could send the committee details in writing.

“I think it’s a serious attempt to really come to a proper conclusion — a fitting conclusion to this kind of conundrum that’s been there, actually, for a long time.”

“There needs to be a robust age verification system that we can all get behind,” he added.

The UK government is expected to publish a White Paper setting out its policy ideas for regulating social media and safety before the end of the winter.

The detail of its policy plans remain under wraps so it’s unclear whether the Home Office intends to include setting up a centralized system of online age verification for robustly identifying kids on social media platforms as part of its safety-focused regulation. But much of the debate driving the planned legislation has fixed on content risks for kids online.

Such a step would also not be the first time UK ministers have pushed the envelop around online age verification.

A controversial system of age checks for viewing adult content is due to come into force shortly in the UK under the Digital Economy Act — albeit, after a lengthy delay. (And ignoring all the hand-wringing about privacy and security risks; not to mention the fact age checks will likely be trivially easy to dodge by those who know how to use a VPN etc, or via accessing adult content on social media.)

But a centralized database of children for age verification purposes — if that is indeed the lines along which the Home Office is thinking — sounds rather closer to Chinese government Internet controls.

Given that, in recent years, the Chinese state has been pushing games companies to age verify users to enforce limits on play time for kids (also apparently in response to health concerns around video gaming addiction).

The UK has also pushed to create centralized databases of web browsers’ activity for law enforcement purposes, under the 2016 Investigatory Powers Act. (Parts of which it’s had to rethink following legal challenges, with other legal challenges ongoing.)

In recent years it has also emerged that UK spy agencies maintain bulk databases of citizens — known as ‘bulk personal datasets‘ — regardless of whether a particular individual is suspected of a crime.

So building yet another database to contain children’s ages isn’t perhaps as off piste as you might imagine for the country.

Returning to the DCMS committee’s enquiry, other questions for Snap from MPs included several critical ones related to its ‘streaks’ feature — whereby users who have been messaging each other regularly are encouraged not to stop the back and forth.

The parliamentarians raised constituent and industry concerns about the risk of peer pressure being piled on kids to keep the virtual streaks going.

Snap’s reps told the committee the feature is intended to be a “celebration” of close friendship, rather than being intentionally designed to make the platform sticky and so encourage stress.

Though they conceded users have no way to opt out of streak emoji appearing.

They also noted they have previously reduced the size of the streak emoji to make it less prominent.

But they added they would take concerns back to product teams and re-examine the feature in light of the criticism.

You can watch the full committee hearing with Snap here.

Competition policy must change to help startups fight ‘winner takes all’ platforms, says UK report

A independent report commissioned by the UK government to examine how competition policy needs to adapt itself for the digital age has concluded that tech giants don’t face adequate competition and the law needs updating to address what it dubs the “novel” challenges of ‘winner takes all’ platforms.

The panel also recommends more policy interventions to actively support startups, including a code of conduct for “the most significant digital platforms”; and measures to foster data portability, open standards and interoperability to help generate competitive momentum for rival innovations.

UK chancellor Philip Hammond announced the competition market review last summer, saying the government was committed to asking “the big questions about how we ensure these new digital markets work for everyone”.

The culmination of the review — a 150-page report, published today, entitled Unlocking digital competition — is the work of the government’s digital competition expert panel which is chaired by former U.S. president Barack Obama’s chief economic advisor, professor Jason Furman.

“The digital sector has created substantial benefits but these have come at the cost of increasing dominance of a few companies which is limiting competition and consumer choice and innovation. Some say this is inevitable or even desirable. I think the UK can do better,” Furman said today in a statement.

In the report the panel writes that it believes competition policy should be “given the tools to tackle new challenges, not radically shifted away from its established basis”.

“In particular, policy should remain based on careful weighing of economic evidence and models,” they suggest, arguing also that “consumer welfare” remains the “appropriate perspective to motivate competition policy” — and rejecting the idea that a completely new approach is needed.

But, crucially, their view of consumer welfare is a broad church, not a narrow price trench — with the report asserting that a consumer welfare basis to competition law is able to also take account of other things, including (but also not limited to) “choice, quality and innovation”. 

Furman said the panel, which was established in September 2018, has outlined “a balanced proposal to give people more control over their data, give small businesses more of a chance to enter and thrive, and create more predictability for the large digital companies”.

“These recommendations will deliver an economic boost driven by UK tech start-ups and innovation that will give consumers greater choice and protection,” he argues.

Commenting on the report’s publication, Hammond said: “Competition is fundamental to ensuring the market works in the interest of consumers, but we know some tech giants are still accumulating too much power, preventing smaller businesses from entering the market,” adding that: “The work of Jason Furman and the expert panel is invaluable in ensuring we’re at the forefront of delivering a competitive digital marketplace.”

The chancellor said that the government will “carefully examine” the proposals and respond later this year — with a plan for implementing changes he said are necessary “to ensure our digital markets are competitive and consumers get the level of choice they deserve”.

Pro-startup regulation required

The panel rejects the view — mostly loudly propounded by tech giants and their lobbying vehicles — that competition is thriving online, ergo no competition policy changes are needed.

It also rejects the argument that digital platforms are “natural monopolies” and competition is impossible — dismissing the idea of imposing utility-like regulation, such as in the energy sector.

Instead, the panel writes that it sees “greater competition among digital platforms as not only necessary but also possible — provided the right policies are in place”. The biggest “missing set of policies” are ones that would “actively help foster competition”, it argues in the report’s introduction.

“Instead of just relying on traditional competition tools, the UK should take a forward-looking approach that creates and enforces a clear set of rules to limit anti-competitive actions by the most significant digital platforms while also reducing structural barriers that currently hinder effective competition,” the panel goes on to say, calling for new rules to tackle ‘winner take all’ tech platforms that are based on “generally agreed principles and developed into more specific codes of conduct with the participation of a wide range of stakeholders”. 

Coupled with active policy efforts to support startups and scale-ups — by making it easier for consumers to move their data across digital services; pushing for systems to be built around open standards; and for data held by tech giants to be made available for competitors — the suggested reforms would support a system that’s “more flexible, predictable and timely” than the current regime, they assert.

Among the panel’s specific recommendations are a call to set up a new competition unit with expertise in technology, economics and behavioural science, plus the legal powers to back it up.

The panel envisages this unit focusing on giving users more control over their data — to foster platform switching — as well as developing a code of competitive conduct that would apply to the largest platforms. “This would be applied only to particularly powerful companies, those deemed to have ‘strategic market status’, in order to avoid creating new burdens or barriers for smaller firms,” they write.

Another recommendation is to beef up regulators’ existing powers for tackling illegal anti-competitive practices — to make it quicker and simpler to prosecute breaches, with the report highlighting bullying tactics by market leaders as a current problem.

“There is nothing inherently wrong about being a large company or a monopoly and, in fact, in many cases this may reflect efficiencies and benefits for consumers or businesses. But dominant companies have a particular responsibility not to abuse their position by unfairly protecting, extending or exploiting it,” they write. “Existing antitrust enforcement, however, can often be slow, cumbersome, and unpredictable. This can be especially problematic in the fast-moving digital sector.

“That is why we are recommending changes that would enable more use of interim measures to prevent damage to competition while a case is ongoing, and adjusting appeal standards to balance protecting parties’ interests with the need for the competition authority to have usable tools and an appropriate margin of judgement. The goal is to place less reliance on large fines and drawn-out procedures, instead enabling faster action that more directly targets and remedies the problematic behavior.”

The expert panel also says changes to merger rules are required to enable the UK’s Competition and Markets Authority (CMA) to intervene to stop digital mergers that are likely to damage future competition, innovation and consumer choice — saying current decisions are too focused on short-term impacts.

“Over the last 10 years the 5 largest firms have made over 400 acquisitions globally. None has been blocked and very few have had conditions attached to approval, in the UK or elsewhere, or even been scrutinised by competition authorities,” they note.

More priority should be given to reviewing the potential implications of digital mergers, in their view.

Decisions on whether to approve mergers, by the CMA and other authorities, have often focused on short-term impacts. In dynamic digital markets, long-run effects are key to whether a merger will harm competition and consumers. Could the company that is being bought grow into a competitor to the platform? Is the source of its value an innovation that, under alternative ownership, could make the market less concentrated? Is it being bought for access to consumer data that will make the platform harder to challenge? In principle, all of these questions can inform merger decisions within the current, mainstream framework for competition, centred on consumer welfare. There is no need to shift away from this, or implement a blanket presumption against digital mergers, many of which may benefit consumers. Instead, these issues need to be considered more consistently and effectively in practice.

In part the CMA can achieve this through giving a higher priority to merger decisions in digital markets. These cases can be complex, but they affect markets that are critically important to consumers, providing services that shape the digital economy.

In another recommendation which targets the Google -Facebook adtech duopoly, the report also calls for the CMA to launch a formal market study into the digital advertising market — which it notes suffers from a lack of transparency.

The panel also notes similar concerns raised by other recent reviews.

Digital advertising is increasingly driven by the use of consumers’ personal data for targeting. This in turn drives the competitive advantage for platforms able to learn more about more users’ identity, location and preferences. The market operates through a complex chain of advertising technology layers, where subsidiaries of the major platforms compete on opaque terms with third party businesses. This report joins the Cairncross Review and Digital, Culture, Media and Sport Committee in calling for the CMA to use its investigatory capabilities and powers to examine whether actors in these markets are operating appropriately to deliver effective competition and consumer benefit.

The report also calls for new powers to force the largest tech companies to open up to smaller firms by providing access to key data sets, albeit without infringing on individual privacy — citing Open Banking as a “notable” data mobility model that’s up and running.

“Open Banking provides an instructive example of how policy intervention can overcome technical and co-ordination challenges and misaligned incentives by creating an adequately funded body with the teeth to drive development and implementation by the nine largest financial institutions,” it suggests.

The panel urges the UK to engage internationally on the issue of digital regulation, writing that: “Many countries are considering policy changes in this area. The United Kingdom has the opportunity to lead by example, by helping to stimulate a global discussion that is based on the shared premise that competition is beneficial, competition is possible, but that we need to update our policies to protect and expand this competition for the sake of consumers and vibrant, dynamic economies.”

And in just one current example of the considerable chatter now going on around tech + competition, a House of Lords committee this week also recommended public interest tests for proposed tech mergers, and suggested an overarching digital regulator is needed to help plug legislative gaps and work through regulatory overlap.

Discussing the pros and cons of concentration in digital markets, the expert competition panel notes the efficiency and convenience that this dynamic can offer consumers and businesses, as well as potential gains via product innovation.

However the panel also points to what it says can be “substantial downsides” from digital market concentration, including erosion of consumer privacy; barriers to entry and scale for startups; and blocks to wider innovation, which it asserts can “outweigh any static benefits” — writing:

It can raise effective prices for consumers, reduce choice, or impact quality. Even when consumers do not have to pay anything for the service, it might have been that with more competition consumers would have given up less in terms of privacy or might even have been paid for their data. It can be harder for new companies to enter or scale up. Most concerning, it could impede innovation as larger companies have less to fear from new entrants and new entrants have a harder time bringing their products to market — creating a trade-off where the potential dynamic costs of concentration outweigh any static benefits.

The panel takes a clear view that “competition for the market cannot be counted on, by itself, to solve the problems associated with market tipping and ‘winner-takes-most’” — arguing that past regulatory interventions have helped shift market conditions, by facilitating the technology changes that created new markets and companies which led to dominant tech giants of old being unseated.

So, in other words, the panel believes government action can unlock market disruption — and it’s too simplistic a narrative to say technological change alone can reset markets.

For example, IBM’s dominance of hardware in the 1960s and early 1970s was rendered less important by the emergence of the PC and software. Microsoft’s dominance of operating systems and browsers gave way to a shift to the internet and an expansion of choice. But these changes were facilitated, in part, by government policy — in particular antitrust cases against these companies, without which the changes may never have happened.

The panel also argues there’s an acceleration of market dominance in the modern digital economy that makes it even more necessary for governments to respond, writing that “network effects and returns to scale of data appear to be even more entrenched and the market seems to have stabilised quickly compared to the much larger degree of churn in the early days of the World Wide Web”.

They also point to the risk of AI and machine learning technology leading to further market concentration, warning that “the companies most able to take advantage of [the next technological revolution] may well be the existing large companies because of the importance of data for the successful use of these tools”.

And while they suggest AI startups might offer a route to a competitive reset, via a substantial technology shift, there’s still currently no relief to be had from entrepreneurial efforts because of “the degree that entrants are acquired by the largest companies – with little or no scrutiny”.

Discussing other difficulties related to regulating big tech, the panel warns of the risk of regulators being “captured by the companies they are regulating”; as well as point out they are generally at a disadvantage vs the high tech innovators they are seeking to rule.

In a concluding chapter considering the possible impacts of their policy recommendations, the panel argues that successful execution of their approach could help foster startup innovation across a range of sectors and services.

“Across digital markets, implementing the recommendations will enable more new companies to turn innovative ideas into great new services and profitable businesses,” they suggest. “Some will continue to be acquired by large platforms, where that is the best route to bring new technology to a large group of users. Others will grow and operate alongside the large platforms. Digital services will be more diverse, more dynamic, with more specialisation and choice available for consumers wanting it. This could drive a flourishing of investment in these UK businesses.”

Citing some “potential examples” of services that could evolve in this more supportively competitive environment they suggest social content aggregators might arise that “bring together the best material from people’s friends across different platforms and sites”; “privacy services could give consumers a single simple place to manage the information they share across different platforms”; and also envisage independent ad tech businesses and changed market dynamics that can “rebalance the share of advertising revenue back towards publishers”.

The main envisaged benefits for consumers boil down to greater service and feature choice; enhanced privacy and transparency; and genuine control over the services they use and how they want to use them.

While for startups and scale-ups the panel sees open standards and access to data — and indeed effective enforcement, by the new digital markets unit — creating “a wide range of opportunities to develop and serve new markets adjacent to or interconnected with existing digital platforms”.

The combined impact should be to strengthen and deepen the competitive digital ecosystem.

Another envisaged benefit for startups is “trust in the framework and recognition that promising, innovative digital businesses will be protected from foreclosure or exclusion” which they argue “should catalyse investment in UK digital businesses, driving the sector’s growth”.

“The changes to competition law… mean that where a business can grow into a successful competitor, that route to further growth is protected and companies will not in the future see being subsumed into a dominant platform as the only realistic business model,” they add.