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  • feedwordpress 13:43:08 on 2018/09/06 Permalink
    Tags: , , , , , , politics, , ,   

    Facebook, Twitter, and the Senate Hearings: It’s The Business Model, Period. 

    “We weren’t expecting any of this when we created Twitter over 12 years ago, and we acknowledge the real world negative consequences of what happened and we take the full responsibility to fix it.”

    That’s the most important line from Twitter CEO Jack Dorsey’s testimony yesterday – and in many ways it’s also the most frustrating. But I agree with Ben Thompson, who this morning points out (sub required) that Dorsey’s philosophy on how to “fix it” was strikingly different from that of Facebook COO Sheryl Sandberg (or Google, which failed to send a C-level executive to the hearings). To quote Dorsey (emphasis mine): “Today we’re committing to the people and this committee to do that work and do it openly. We’re here to contribute to a healthy public square, not compete to have the only one. We know that’s the only way our business thrives and helps us all defend against these new threats.”

    Ben points out that during yesterday’s hearings, Dorsey was willing to tie the problems of public discourse on Twitter directly to the company’s core business model, that of advertising. Sandberg? She ducked the issue and failed to make the link.

    You may recall my piece back in January, Facebook Can’t Be Fixed. In it I argue that the only way to address Facebook’s failings as a public square would be to totally rethink its core advertising model, a golden goose which has driven the company’s stock on an six-year march to the stratosphere. From the post:

    “[Facebook’s ad model is] the honeypot which drives the economics of spambots and fake news, it’s the at-scale algorithmic enabler which attracts information warriors from competing nation states, and it’s the reason the platform has become a dopamine-driven engagement trap where time is often not well spent.

    To put it in Clintonese: It’s the advertising model, stupid.

    We love to think our corporate heroes are somehow super human, capable of understanding what’s otherwise incomprehensible to mere mortals like the rest of us. But Facebook is simply too large an ecosystem for one person to fix.”

    That one person, of course, is Mark Zuckerberg, but what I really meant was one company – Facebook. It’s heartening to see Sandberg acknowledge, as she did in her written testimony, the scope and the import of the challenges Facebook presents to our democracy (and to civil society around the world). But regardless of sops to “working closely with law enforcement and industry peers” and “everyone working together to stay ahead,” it’s clear Facebook’s approach to “fixing” itself remains one of going it alone. A robust, multi-stakeholder approach would quickly identify Facebook’s core business model as a major contributor to the problem, and that’s an existential threat.

    Sandberg’s most chilling statement came at the end of of her prepared remarks, in which she defined Facebook as engaged in an “arms race” against actors who co-opt the company’s platforms. Facebook is ready, Sandberg implied, to accept the challenge of lead arms producer in this race: “We are determined to meet this challenge,” she concludes.

    Well I’m sorry, I don’t want one private company in charge of protecting civil society. I prefer a more accountable social structure, thanks very much.

    I’ve heard this language of “arms races” before, in far less consequential framework: Advertising fraud, in particular on Google’s search platforms. To combat this fraud, Google locked arms with a robust network of independent companies, researchers, and industry associations, eventually developing a solution that tamed the issue (it’s never going to go away entirely).  That approach – an open and transparent process, subject to public checks and balances – is what is desperately needed now, and what Dorsey endorsed in his testimony. He’s right to do so. Unlike Google’s ad fraud issues of a decade ago, Facebook and Twitter’s problems extend to life or death, on-the-ground consequences – the rise of a dictator in the Philippines, genocide in Myanmar, hate crimes in Sri Lanka, and the loss of public trust (and possibly an entire presidential election) here in the United States. The list is terrifying, and it’s growing every week.

    These are not problems one company, or even a heterogenous blue ribbon committee, can or should “fix.” Facebook does not bear full responsibility for these problems – anymore than Trump is fully responsible for the economic, social, and cultural shifts which swept him into office last year.  But just as Trump has become the face of what’s broken in American discourse today, Facebook – and tech companies more broadly – have  become the face of what’s broken in capitalism. Despite its optimistic, purpose driven, and ultimately naive founding principles, the technology industry has unleashed a mutated version of steroidal capitalism upon the world, failing along the way to first consider the potential damage its business models might wreak.

    In an OpEd introducing the ideas in his new book “Farsighted”, author Steven Johnson details how good decisions are made, paying particular attention to how important it is to have diverse voices at the table capable of imagining many different potential scenarios for how a decision might play out. “Homogeneous groups — whether they are united by ethnic background, gender or some other commonality like politics — tend to come to decisions too quickly,” Johnson writes.  “They settle early on a most-likely scenario and don’t question their assumptions, since everyone at the table seems to agree with the broad outline of the interpretation.”

    Sounds like the entire tech industry over the past decade, no?

    Johnson goes on to quote the economist and Nobel laureate Thomas Schelling: “One thing a person cannot do, no matter how rigorous his analysis or heroic his imagination, is to draw up a list of things that would never occur to him.”

    It’s clear that the consequences of Facebook’s platforms never occurred to Zuckerberg, Sandberg, Dorsey, or other leaders in the tech industry. But now that the damage is clear, they must be brave enough to consider new approaches.

    To my mind, that will require objective study of tech’s business models, and an open mind toward changing them. It seems Jack Dorsey has realized that. Sheryl Sandberg and her colleagues at Facebook? Not so much.

     

     

     

     
  • feedwordpress 17:32:13 on 2018/08/28 Permalink
    Tags: elections, , fake news, free press, , , , , , , politics, ,   

    Hey Jack, Sheryl, and Sundar: It’s Time to Call Out Trump On Fake News. 

    Next week Sheryl Sandberg, COO of Facebook, and Jack Dorsey, CEO of Twitter, will testify in front of Congress. They must take this opportunity to directly and vigorously defend the role that real journalism plays not only on their platforms, but also in our society at large. They must declare that truth exists, that facts matter, and that while reasonable people can and certainly should disagree about how to respond to those facts, civil society depends on rational discourse driven by an informed electorate.

    Why am I on about this? I do my very best to ignore our current president’s daily doses of Twitriol, but I couldn’t whistle past today’s rant about how tech platforms are pushing an anti-Trump agenda.

    Seems the president took a look at himself in Google’s infinite mirror, and he apparently didn’t like what he saw. Of course, a more cynical reading would be that his advisors reminded him that senior executives from Twitter, Facebook, and Google* are set to testify in front of Congress next week, providing a perfect “blame others and deflect narrative from myself” moment for our Bully In Chief.

    Trump’s hatred for journalism is legendary, and his disdain for any truth that doesn’t flatter is well established. As numerous actual news outlets have already established, there’s simply no evidence that Google’s search algorithms do anything other than reflect the reality of Trump news,  which in the world of *actual journalism* where facts and truth matter, is fundamentally negative. This is not because of bias – this is because Trump creates fundamentally negative stories. You know, like failing to honor a war hero, failing to deliver on his North Korea promises, failing to fix his self-imposed policy of imprisoning children, failing to hire advisors who can avoid guilty verdicts….and all that was just in the last week or so.

    But the point of this post isn’t to go on a rant about our president. Instead, I want to make a point about the leaders of our largest technology platforms.

    It’s time Jack, Sheryl, Sundar, and others take a stand against this insanity.  Next week, at least two of them actually have just that chance.

    I’ll lay out my biases for anyone reading who might suspect I’m an agent of the “Fake News Media.” I’m on the advisory board of NewsGuard, a startup that ranks news sites for accuracy and reliability. I’m running NewsGuard’s browser plug in right now, and every single news site that comes up for a Google News search on “Trump News” is flagged as green – or reliable.

    NewsGuard is run by two highly respected members of the “real” media – one of whom is a longstanding conservative, the other a liberal.

    I’m also an advisor and investor in RoBhat Labs, which recently released a plugin that identifies fake images in news articles. Beyond that, I’ve taught journalism at UC Berkeley, where I graduated with a masters after two years of study and remain on the advisory board. I’m also a member of several ad-hoc efforts to address what I’ve come to call the “Real Fake News,” most of which peddles far right wing conspiracy theories, often driven by hostile state actors like Russia. I’ve testified in front of Congress on these issues, and I’ve spent thirty years of my life in the world of journalism and media. I’m tired of watching our president defame our industry, and I’m equally tired of watching the leaders of our tech industry fail to respond to his systematic dismantling of our civil discourse (or worse, pander to it).

    So Jack, Sheryl, and whoever ends up coming from Google, here’s my simple advice: Stand up to the Bully in Chief. Defend civil discourse and the role of truth telling and the free press in our society. A man who endlessly claims that the press is the enemy is a man to be called out. Heed these words:

    “It is the press, above all, which wages a positively fanatical and slanderous struggle, tearing down everything which can be regarded as a support of national independence, cultural elevation, and the economic independence of the nation.”

    No one would claim these are Trump’s words, the prose is far too elegant. But the sentiment is utterly Trumpian. With with apologies to Mike Godwin, those words belong to Adolf Hitler. Think about that, Jack, Sheryl, and Sundar. And speak from your values next week.

    *Google tried to send its general counsel, Kent Walker, but Congress is tired of hearing from lawyers. It’s uncertain if the company will step up and send an actual leader like Sundar or Susan. 

     

     
  • feedwordpress 14:20:01 on 2018/08/27 Permalink
    Tags: , , , , , , politics,   

    The Accountable Capitalism Act: It’ll Never Happen, But At Least Now the Conversation Will 

    The past week or so has seen a surge in commentary on the role of corporations in society, a theme familiar to readers of this site. While it might be convenient to peg the trend to Senator Elizabeth Warren’s newly minted Accountable Capitalism Act (more on that in a second), I think it’s more likely that – finally – our collective will is turning to our most logical and obvious instrument of social change, namely, the instrument of business.

    We humans like to organize ourselves into social units. They range from the informal (pickup basketball games) to the elaborately structured (Senate hearings). Our ability to harness collective will is unsurpassed in the animal kingdom, it’s one of our key evolutionary adaptations, driving the success of our species across the globe.

    As I’ve argued elsewhere, one of our most sophisticated social structures is the corporation, which has co-evolved with our various systems of government over the past half millennium or so. The very first corporations were in fact formed (or chartered) by governments – the Dutch East India Company is the most common example of this. In the past century, however, corporations have largely sought to shake the yoke of government regulation – and nowhere have corporations won more freedoms than in the United States, where firms are now considered legal persons with an unrestrained right to “free speech” (IE, the ability to fund political positions).

    So this is where we are today: Large corporations have the legal right to exercise unlimited influence over our political sphere, and the commercial imperative to control (and profit from) nearly all our society’s data. That kind of power will necessarily produce a backlash, on that’s found an articulate, but highly unlikely, argument in Senator Warren’s proposed legislation. From the release announcing the Accountable Capitalism Act:

    For most of our country’s history, American corporations balanced their responsibilities to all of their stakeholders – employees, shareholders, communities – in corporate decisions. It worked: profits went up, productivity went up, wages went up, and America built a thriving middle class.

    But in the 1980s a new idea quickly took hold: American corporations should focus only on maximizing returns to their shareholders. That had a seismic impact on the American economy. In the early 1980s, America’s biggest companies dedicated less than half of their profits to shareholders and reinvested the rest in the company. But over the last decade, big American companies have dedicated 93% of earnings to shareholders – redirecting trillions of dollars that could have gone to workers or long-term investments. The result is that booming corporate profits and rising worker productivity have not led to rising wages.

    Additionally, because the wealthiest top 10% of American households own 84% of all American – held shares-while more than 50% of American households own no stock at all – the dedication to “maximizing shareholder value” means that the multi-trillion dollar American corporate system is focused explicitly on making the richest Americans even richer. 

    Here are a few of the act’s key proposals:

    • Companies with more than $1 billion in revenues must register with, and agree to be regulated by, a new Federal oversight body known as the Office of United States Corporations.  By registering, firms are obliged to “consider the interests of all corporate stakeholders – including employees, customers, shareholders, and the communities in which the company operates.” This enshrines what is often called a “multi-stakeholder philosophy,” the underpinning of B Corps like Patagonia and Kickstarter, into federal law.
    • A corporations’ workers would be empowered to elect at least forty percent of their firms’ board of directors.
    • Long term restrictions on the sale of stock by board directors and corporate officers – three years for stock buy backs, and five years for everything else. This is to insure that a large firms’ managers plan for the long term.
    • A prohibition on political spending of any kind without approval from 75 percent of both directors and shareholders.

    There’s more, but I think you’ve got the point – this is a sweeping and presently impossible piece of legislation that radically rethinks the governance of our most powerful corporations. It guts corporate political spending, upends business’s current compensation structure (often based on stock grants), radically reshapes board governance (giving a near majority control to workers), and creates a massive conservative bogeyman in the form of yet another Federal government oversight entity. In today’s political environment, Warren’s legislation is DOA.

    But in tomorrow’s? Quite possibly not. Senator Warren is widely considered a front-runner for the Democratic nomination in 2020, and her initial opponent won’t be Trump – it’ll be Bernie Sanders, whose supporters likely will find plenty to love in Warren’s new plan.

    Regardless of whether the act has any chance of passing without a strong Democratic majority in both houses of Congress, Warren has smartly identified a central issue in our country’s political conversation, and declared it to be fundamental to the Democrats’ platform for 2020. It’s about time someone did.

    More recent reading on the role of capitalism in our society: 

    Louis Hyman: It’s Not Technology That’s Disrupting Our Jobs

    L.M. Sacasas: Technopoly and Anti-Humanism

    Tom Wheeler: Time to Fix It: Developing Rules for Internet Capitalism

    Neil Irwin: Are Superstar Firms and Amazon Effects Reshaping the Economy? 

     

     

     

     
  • feedwordpress 17:07:06 on 2018/08/01 Permalink
    Tags: , , geopolitics, , , , , , politics, ,   

    Google and China: Flip, Flop, Flap 

    Google’s Beijing offices in 2010, when the company decided to stop censoring its results and exit the market.

    I’ve been covering Google’s rather tortured relationship with China for more than 15 years now. The company’s off again, on again approach to the Internet’s largest “untapped” market has proven vexing, but as today’s Intercept scoop informs us, it looks like Google has yielded to its own growth imperative, and will once again stand up its search services for the Chinese market. To wit:

    GOOGLE IS PLANNING to launch a censored version of its search engine in China that will blacklist websites and search terms about human rights, democracy, religion, and peaceful protest, The Intercept can reveal.

    The project – code-named Dragonfly – has been underway since spring of last year, and accelerated following a December 2017 meeting between Google’s CEO Sundar Pichai and a top Chinese government official, according to internal Google documents and people familiar with the plans.

    If I’m reading story correctly, it looks like Google’s China plans, which were kept secret from nearly all of the company’s employees, were leaked to The Intercept by concerned members of Google’s internal “Dragonfly” team, one of whom was quoted:

    “I’m against large companies and governments collaborating in the oppression of their people, and feel like transparency around what’s being done is in the public interest,” the source said, adding that they feared “what is done in China will become a template for many other nations.”

    This news raises any number of issues – for Google, certainly, but given the US/China trade war, for anyone concerned with the future of free trade and open markets. And it revives an age old question about where the line is between “respecting the rule of law in markets where we operate,” a standard tech company response to doing business on foreign soil, and “enabling authoritarian rule,” which is pretty much what Google will be doing should it actually launch the Dragonfly app.

    A bit of history. Google originally refused to play by China’s rules, and in my 2004 book, I reviewed the history, and gave the company props for taking a principled stand, and forsaking what could have been massive profits in the name of human rights. Then, in 2006, Google decided to enter the Chinese market, on government terms. Google took pains to explain its logic:

    We ultimately reached our decision by asking ourselves which course would most effectively further Google’s mission to organize the world’s information and make it universally useful and accessible. Or, put simply: how can we provide the greatest access to information to the greatest number of people?

    I didn’t buy that explanation then, and I don’t buy it now. Google is going into China for one reason, and one reason alone: Profits. As Google rolled out its service in 2006, I penned something of a rant, titled “Never Poke A Dragon While It’s Eating.” In it I wrote:

    The Chinese own a shitload of our debt, and are consuming a shitload of the world’s export base of oil. As they consolidate their power, do you really believe they’re also planning parades for us? I’m pretty sure they’ll be celebrating decades of US policy that looked the other way while the oligarchy used our technology (and that includes our routers, databases, and consulting services) to meticulously undermine the very values which allowed us to create companies like Google in the first place. But those are not the kind of celebrations I’m guessing we’d be invited to.

    So as I puzzle through this issue, understanding how in practical terms it’s really not sensible to expect that some GYMA pact is going to change the world (as much as I might wish it would), it really, honestly, comes down to one thing: The man in the White House.

    Until the person leading this country values human rights over appeasement, and decides to lead on this issue, we’re never going to make any progress. 

    Google pulled out of China in 2010, using a China-backed hacking incident as its main rationale (remember that?!).  The man in the White House was – well let’s just say he wasn’t Bush, nor Clinton, and he wasn’t Trump. In any case, the hacking incident inconveniently reminded Google that the Chinese government has no qualms about using data derived from Google services to target its own citizens.

    Has the company forgotten that fact? One wonders. Back in 2010, I praised the company for standing up to China:

    In this case, Google is again taking a leadership role, and the company is forcing China’s hand. While it’s a stretch to say the two things are directly connected, the seeming fact that China’s government was behind the intrusions has led Google to decide to stop censoring its results in China. This is politics at its finest, and it’s a very clear statement to China: We’re done playing the game your way.

    Seems Google’s not done after all. Which is both sad, and utterly predictable. Sad, because in today’s political environment, we need our companies to lead on moral and human rights issues. And predictable, because Android has a massive hold on China’s internet market, and Google’s lack of a strong search play there threatens not only the company’s future growth in its core market, but its ability to leverage Android across all its services, just as it has in Europe and the United States.

    Google so far has not made a statement on The Intercept’s story, though I imagine smoke is billowing out of some communications war room inside the company’s Mountain View headquarters.  Will the company attempt some modified version of its 2006 justifications? I certainly hope not. This time, I’d counsel, the company should just tell the truth: Google is a public company that feels compelled to grow, regardless of whether that growth comes at a price to its founding values. Period, end of story.

    I’ll end with another quote from that 2006 “Don’t Poke a Dragon” piece:

    …companies like Yahoo and Google don’t traffic in sneakers, they traffic in the most powerful forces in human culture – expression. Knowledge. Ideas. The freedom of which we take as fundamental in this country, yet somehow, we seem to have forgotten its importance in the digital age – in China, one protesting email can land you in jail for 8 years, folks.

    …Congress can call hearings, and beat up Yahoo, Google and the others for doing what everyone else is doing, but in the end, it’s not (Google’s) fault, nor, as much as I wish they’d take it on, is it even their problem. It’s our government’s problem….Since when is China policy somehow the job of private industry?

    Until that government gives (the tech industry) a China policy it can align behind, well, they’ll never align, and the very foundation of our culture – free expression and privacy, will be imperiled.

    After all, the Chinese leaders must be thinking, as they snack on our intellectual property, we’re only protecting our citizens in the name of national security.

    Just like they do in the US, right?

     
  • feedwordpress 21:41:10 on 2018/07/28 Permalink
    Tags: , , , politics, ,   

    When Senators Ask Followup Questions, You Answer Them. 

    Following my Senate testimony last month, several Senators reached out with additional questions and clarification requests. As I understand it this is pretty standard. Given I published my testimony here earlier, I asked if I could do the same for my written followup. The committee agreed, the questions and my answers are below.

    Questions for the Record from Sen. Cortez Masto (D. Nevada)

    Facebook Audits

    On April 4, 2018, following the public controversy over Cambridge Analytica’s use of user data, Facebook announced several additional changes to its privacy policies. The changes include increased restrictions on apps’ ability to gather personal data from users and also a policy of restricting an app’s access to user data if that user has not used the app in the past three months. In addition, Facebook has committed to conducting a comprehensive review of all apps gathering data on Facebook, focusing particularly on apps that were permitted to collect data under previous privacy policies. Facebook will also notify any users affected by the Cambridge Analytica data leak.

    Question 1: What steps can the government take to ensure that there is proper oversight of these reviews and audits?

    John Battelle’s response:

    I think this is a simple answer: Make sure Facebook does what it says it will do, and make sure its response is a matter not only of public record, but also public comment. This should include a full and complete accounting of how the audit was done and the findings.

    Question 2: From a technical standpoint, how effective are forensic methods at ascertaining information related to what data was transferred in these cases?

    John Battelle’s response:

    I’m not a technologist, I’m an entrepreneur, author, analyst and commentator. I’d defer to someone who has more knowledge than myself on issues of forensic data analysis.  

    Technology for Consumer Protection

    Question 1: Are there any technological solutions being developed that can help address some of the issues of consumers’ privacy being violated online?

    John Battelle’s response:

    Yes, there are many, likely too many to mention. Instead, what I’d like to highlight is the importance of the architecture of how data flows in our society. We should be creating a framework that allows data to flow ethically, securely, and with key controls around permissioning, editing, validation, revocation, and value exchange. Blockchains hold great promise here, but are still underdeveloped (but they’re evolving rapidly).

    Data Retention

    Question 1: What should we, as legislators, be thinking about to verify that – when Americans are told that their data has been destroyed – that deletion can actually be confirmed?

    John Battelle’s response:

    Independent third party auditing services that services such as Facebook must employ seems the most straightforward response. “Trust us” is not enough, we must trust and verify.

    Law Enforcement

    During the hearing we had a brief discussion on the balance between privacy and sharing data with law enforcement.

    Question 1: What should companies keep in mind to ensure that they can appropriately assist in law enforcement investigations?

    John Battelle’s response:

    This is a delicate balance, as evinced in the varied responses to these kind of cases from companies like Apple, Twitter, Yahoo, and others. Valid search warrants, not fishing expeditions, should be the rule. We’ve got the framework for this already. The issue of how governments and law enforcement deal with encryption is unresolved. However, I fall on the side of enabling strong encryption, as I believe all citizens have the right to privacy. Lose that, and we lose democracy.  

    Questions 2: As lawmakers, what should we be aware of as we try to strike the right balance between privacy and safety in this area?

    John Battelle’s response:

    Democracy is open, messy, transparent, and has many failures. But it’s the best system yet devised (in my humble opinion) and privacy lies at its core. That means criminals will be able to abuse its benefits. That is a tradeoff we have to accept and work around. Sure, it’d be great if law enforcement had access to all the data created by its citizens. Until it’s abused, and cases of this kind of abuse by government are easy to find.

    Senator Richard Blumenthal (D. Conn) Questions for the Record 

    Privacy Legislation

    Across hearings and questions for the record, members of Congress have raised concerns about the data collection tactics used by Facebook that are not made clear to its users. As I stated during the hearing, I am interested in putting into place rules of the road for online privacy, taking into consideration the European General Data Protection Regulation. During the hearing Mr. Battelle and others offered support for the intent of GDPR, but expressed reservations about the implementation and unintended consequences. I look forward to any further thoughts from the panelists regarding how to implement data privacy rules in the United States.

     Question for All Panelists:

    Question 1. In addition to any recommendations or comments on what types of legislation or other measures could help protect consumer privacy, what lessons and principles of the California Consumer Privacy Act and the GDPR should Congress consider in privacy legislation?

     John Battelle’s response:

    Implementation of sweeping legislation like those mentioned above is extremely onerous for small business. Instead of using that as an excuse to avoid legislation, the policy should incorporate remedies for smaller business (IE, enabling federation of resources and response/compliance, enabling trusted intermediaries).

    The principle of empowering the consumer is embodied in both GDPR and CCPA. While well intentioned, neither envision how that empowerment will truly be effective in a modern digital marketplace. Take the principle of data portability. It’s one thing to allow consumers to download a copy of their data from a platform or service. But for that data to drive innovation, it must be easily uploaded, in a defined, well-governed, machine-readable format, so that new kinds of services can flourish. Watch how large tech platforms chip away at CCPA and attempt to subvert that ecosystem from taking root. Consider how best to ensure that ecosystem will in fact exist. I’m not a legislative analyst, but there must be an enlightened way to encourage a class of data brokers (and yes, they’re not all bad) who enable re-aggregation of consumer data, replete with permissions, revocation, validation, editing, and value exchange. Happy to talk more about this.

    Questions for Mr. Battelle:

    Question 2. You have written at length about the influence of Facebook and Google on the advertising and third party data market. In your experience, has Facebook driven the ad market as a sector to more invasively collect data about people? What other changes in the ad market can be attributed to the dominance of Google and Facebook?

    John Battelle’s response:

    Yes, without question, Facebook has driven what you describe in your initial question. But not for entirely negative reasons. Because Facebook has so much information on its users, larger advertisers feel at a disadvantage. This is also true of publishers who use Facebook for distribution (another important aspect of the platform, especially as it relates to speech and democratic discourse). Both advertisers and publishers wish to have a direct, one to one dialog with their customers, and should be able to do so on any platform. Facebook, however, has forced their business model into the middle of this dialog – you must purchase access to your followers and your readers. A natural response is for advertisers and publishers to build their own sophisticated databases of their customers and potential customers. This is to be expected, and if the data is managed ethically and transparently, should not be considered an evil.

    As for other changes in the ad market that might be attributed to FB and GOOG, let’s start with the venture funding of media startups, or advertising-dependent startups of any kind. Given the duopoly’s dominance of the market, it’s become extremely hard for any entrepreneur to find financing for ideas driven by an advertising revenue stream. Venture capitalists will say “Well, that’s a great (idea, service, product), but no way am I going to fund a company that has to compete with Google or Facebook.” This naturally encourages a downward spiral in innovation.

    Another major problem in ad markets is the lack of portable data and insights between Facebook and Google. If I’m an advertiser or publisher on Facebook, I’d like a safe, ethical, and practical way to know who has responded to my messaging on that platform, and to take that information across platforms, say to Google’s YouTube or Adwords. This is currently far too hard to do, if not impossible in many cases. This also challenges innovation across the business ecosystem.

    Questions for the Record

    Senator Margaret Wood Hassan (D. New Hampshire)

    Question 1. The internet has the potential to connect people with ideas that challenge their worldview, and early on many people were hopeful that the internet would have just that effect. But too often we have seen that social media sites like Facebook serve instead as an echo chamber that polarizes people instead of bringing them together, showing them content that they are more likely to agree with rather than exposing them to new perspectives. Do you agree this is a problem? And should we be taking steps to address this echo chamber effect?

    John Battelle’s response:

    Yes, this filter bubble problem is well defined and I agree it’s one of the major design challenges we face not only for Facebook, but for our public discourse as well. The public square, as it were, has become the domain of private companies, and private companies do not have to follow the same rules as, say, UC Berkeley must follow in its public spaces (Chancellor Carol Christ has been quite eloquent on this topic, see her interview at the NewCo Shift Forum earlier this year).

    As to steps that might be taken, this is a serious question that balances a private corporation’s right to conduct its business as it sees fit, and the rights and responsibilities of a public space/commons. I’d love to see those corporations adopt clear and consistent rules about speech, but they are floundering (see Mr. Zuckerberg’s recent comments on Holocaust deniers, for example). I’d support a multi-stakeholder commission on this issue, including policymakers, company representatives, legal scholars, and civic leaders to address the issue.

    Question 2. In your testimony you discuss the value of data. You stated that you think in some ways, QUOTE, “data is equal to – or possibly even more valuable than – monetary currency.” We in Congress are seeking to figure out the value of data as well to help us understand the costs and benefits of protecting this data. Can you expand on what value you think data has, and how we should be thinking about measuring that value – both as citizens and as legislators?

    John Battelle’s response:

    Just as we had no idea the value of oil when it first came into the marketplace (it was used for lamps and for paving streets, and no one could have imagined the automobile industry), we still have not conceived of the markets, products, and services that could be enabled by free flowing and ethically sourced and permissioned data in our society. It’s literally too early to know, and therefore, too early to legislate in sweeping fashions that might limit or retard innovation. However, one thing I am certain of is that data – which is really a proxy for human understanding and innovation – is the most fundamentally valuable resource in the world. All money is simply data, when you think about it, and therefore a subset of data.

    So how to measure its value? I think at this point it’s impossible – we must instead treat it as an infinitely valuable resource, and carefully govern its use. I’d like to add my response to another Senator’s question here, about new laws (GDPR and the California Ballot initiative) as added reference:

    Implementation of sweeping legislation like those mentioned above is extremely onerous for small business. Instead of using that as an excuse to avoid legislation, the policy should incorporate remedies for smaller business (IE, enabling federation of resources and response/compliance, enabling trusted intermediaries).

    The principle of empowering the consumer is embodied in both GDPR and CCPA. While well intentioned, neither envision how that empowerment will truly be effective in a modern digital marketplace. Take the principle of data portability. It’s one thing to allow consumers to download a copy of their data from a platform or service. But for that data to drive innovation, it must be easily uploaded, in a defined, well-governed, machine-readable format, so that new kinds of services can flourish. Watch how large tech platforms chip away at CCPA and attempt to subvert that ecosystem from taking root. Consider how best to ensure that ecosystem will in fact exist. I’m not a legislative analyst, but there must be an enlightened way to encourage a class of data brokers (and yes, they’re not all bad) who enable re-aggregation of consumer data, replete with permissions, revocation, validation, editing, and value exchange. Happy to talk more about this.

    Question 3. Mark Zuckerberg has said that he sees Facebook more as a government than a traditional company.  Among other things, governments need to be transparent and open about the decisions they make. Many large institutions have set up independent systems — such as offices of inspectors general or ombudsmen and ethics boards — to ensure transparency and internally check bad decisions.  Facebook has none of those controls. What kinds of independent systems should companies like Facebook have to publicly examine and explain their decision-making?

    John Battelle’s response:

    OK, this one is simple. Facebook is NOT a government. If it is, I don’t want to be a “citizen.” I think Mr. Zuckerberg is failing to truly understand what a government truly is. If indeed Facebook wishes to become a nation state, then first it must decide what kind of nation state it wishes to be. It needs a constitution, a clear statement of rights, roles, responsibilities, and processes. None of these things exist at the moment. A terms of service does not a government make.

    However, all of the ideas you mention make a ton of sense for Facebook at this juncture. I’d be supportive of them all.

     
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