Data Digest № 022
Welcome to the 22nd edition of the Data Digest, where I summarize the most important events in the data industry. This week: A new EU court ruling stipulates active consent to cookies, Marketers worry about new privacy laws, another congressional headache for big tech, creepy Amazon products, Zuck’s internal meetings are leaked, debates around encryption, facial-recognition tests in China, and more. Enjoy!
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New EU Court Ruling Stipulates Online Users Must Actively Consent to Cookies
With daily reports of data scandals, breaches and misuse, lawmakers in the EU have taken a stand against user tracking by making user consent a mandatory requirement for any data processing. On October 1st, 2019, the European Union Court of Justice made a key ruling in favor of user privacy over tracking cookie usage on websites. The court ruled EU law will mandate consumers to actively consent to companies installing tracking cookies. As user consent is needed, a “pre-ticked checkbox as the default is therefore insufficient”. The law particularly aims to protect consumers from the “risk of hidden identifiers and other similar devices” entering and interfering with internet users private lives. It was further noted by the court, that the service provider must give consumers information on the duration of the operation of cookies and whether or not third parties have access to them. It’s likely that this will result in less cookies being placed on consumers, meaning less advertising and targeting, and therefore less accurate advertising with potential loss of revenue for adtech. Companies that refuse to comply with the new ruling will also risk significant repercussions in fines― though that hasn’t stopped them before.
Marketers Worry New Privacy Laws In The U.S. Will Be Worse Than Europe’s GDPR
Close to 100,000 marketers at the New York Advertising Week expressed their unease regarding current data privacy regulation. Among the main issues discussed were the dwindling amounts of trust in the news media, tech giants dominating digital ad budgets, and ad avoidance. One of their biggest concerns, however, was new consumer privacy laws and their impact on digital advertising―essentially threatening the way advertisers target people online. Ad-execs from brands such as Mitsubishi and American Express talked of preparations for a “post-cookie world”, claiming that “privacy laws could represent an existential crisis depending on how they’re handled by regulators”. Similarly to Europe’s General Data Protection Regulation, the California Consumer Privacy Act, taking effect on January 1st, 2020, will certainly put pressure on advertisers concerning digital privacy and in some cases will force them to completely alter business models. In the U.S., Senators Amy Klobuchar and Mark Warner are pushing the Honest Ads Act, requiring platforms to follow the same rules for TV and radio, which would require full disclosure of the purchasers of ads. “We’re being squeezed from both sides,” said Chip Schenck, VP of programmatic sales and strategy at Meredith, “We are not going to be able to rely on third-party tech in any way as it relates to tracking, targeting.” For publishers, a work-around in post-cookie targeting is using contextual ads. For instance, if someone was reading a recipe, Meredith would target ads based on whether they came to the website from search or social media. Jason White, the executive vice president and general manager of global programmatic revenue at CBS Interactive said, “I think the opt-out rates are going to be much higher than we anticipate, [advertisers] are just going to have to connect with different device IDs, use propensity models or contextual targeting.” Unidentified objectives are causing a crippling uncertainty for advertisers. While CCPA looms nearer, they simply don’t have the time to just “wait-and-see”.
Another “Congressional Headache” For Big Tech
Bloomberg reports that “big tech firms are about to face yet another congressional headache.” Nydia Velazquez, the House Small Business Committee Chairwoman, is planning to invite Amazon, Alphabet, Google, and Facebook for a congressional hearing to challenge whether the companies are damaging the competitive landscape for small businesses. In June, Velazquez wrote a letter to Amazon claiming that she found a Bloomberg report “deeply troubling”, which noted the company’s plans to stop placing bulk orders with thousands of suppliers. She also noted that the change “could jeopardize small wholesale businesses from continuing to do business with Amazon and affect millions in sales and hundreds of thousands of jobs.” Google is facing similar complaints regarding display advertisements next to search listings, directing potential customers to competitors and to delivery apps which charge hefty fees. Facebook is under heavy scrutiny as well, with accusations pertaining to a change in their algorithms that governs its News Feed which now allegedly dramatically reduce web traffic of some companies. Facebook will undergo further congressional hearings in October as the House Financial Services Committee is due to question Chief Operating Officer Sheryl Sandberg on matters including its plan to create a new digital currency called Libra. The three companies are already facing investigations from the House Antitrust Subcommittee, the Federal Trade Commission and the Justice Department. The mounting hearings display the significant pressure from campaigns and formal investigations to break up big tech, some of which overlap with intent, such as the F.T.C. and the Justice Department’s probe into whether large technology firms have violated the antitrust law.
Amazon’s Sidewalk Stuff Is Really Creepy
The ubiquity of Amazon’s new devices means they could surveil you, even if you don’t own their products. “If you have enough Ring doorbell cameras on your block, it doesn’t matter if you bought one or not; you’re being monitored and, down the road, perhaps your device is pinging them,” said tech activist Liz O’Sullivan. Amazon’s new product “Sidewalk”, a Wi-Fi network to connect devices from a long range, and “Fetch”, a product that essentially surveils your dog, use mesh network technology, meaning they only require a few access points to cover an entire area. In a test, the company sent over 700 Sidewalk enabled devices to their employees and friends and family, and in just three weeks they had the entire L.A. basin fully covered. For those who are in harm’s way, the infiltration of mass-surveillance into every corner of our lives, including simply walking down the street, feels increasingly Orweelian and seems increasingly at odds with fundamental rights to privacy such as the United States’ Fourth Amendment.
Mark Zuckerburg’s Internal Facebook Meetings Are Leaked To The Verge
A two hour internal meeting from July where Mark Zuckerberg addressed concerned employees was leaked to The Verge on Tuesday, and there were some interesting opinions divulged. Topics ranged from competition with apps like the Chinese video app TikTok, to overcoming toxic content that flows through the company’s network every day. On Sen. Elizabeth Warren’s plans to break up Big Tech Zuckerberg said, “I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge.” Sen. Elizabeth Warren hastily replied with a series of tweets which welcomed the fight. On Facebook’s plans to launch Libra, “There’s a lot of important issues that need to be dealt with in preventing money laundering, preventing financing of terrorists and people who the different governments say you can’t do business with. There are a lot of requirements on knowing who your customers are.” And on what Facebook can do to improve its self-image, “Well, look, I think humanizing stuff is always really important. So I’ve always focused more on the substance and trying to deliver things, and a little bit less on the perception. And I think we don’t have that luxury anymore.” Concerns were raised by employees inside the company during a time where, from the outside, the perception of the F.T.C’s. $5 billion fine was that Facebook had essentially won, set the terms of agreement, not to mention boosting their stock prices up. Though their investors may have been celebrating, employees were clearly still extremely anxious about the strong resistance from regulators and critics among their peers. Whether Zuck managed to rally his troops behind him remains unclear. Casey Newton, who exposed the leak reported in his newsletter The Interface, “Facebook’s employees are smart, they are self-aware, and they are asking vital questions about how the company will approach regulation, a potential breakup, competition, criticism and more. Taken together, their questions — along with Zuckerberg’s hyper-rational responses — offer a memorable time capsule of Facebook at a fraught moment.”
The Debate Around Encryption Continues
Privacy advocates, social media giants, and law officials have reached stalemate for the debate around encryption. It seems that protecting the security and privacy of communications is not possible when paired with access for law enforcement. “There’s no safe, foolproof way to implement encryption backdoors. Any vulnerability in the scheme, no matter how hidden or secret, can be discovered by others and potentially abused” writes Lily Hay Newman for Wired. In opposition, Attorney General William Barr is planning to present an open letter on Friday asking Facebook not to implement end-to-end encryption protections across it’s messaging services, cosigned by British and Australian officials. The letter focuses on child exploitation investigations and the responsibility of tech companies in flagging content related to child sexual abuse. “When law enforcement officials talk about all of these truly horrific things that they are attempting to investigate and that they want to compromise encryption to get at, we have to recognize that it would come with serious harms of its own,” EFF’s Crocker says. Unfortunately, it seems there are no solutions that can protect the security and privacy of the user, and offer access to law enforcement through a backdoor without exploitation. It looks like this one will remain a tug of war.
Facial Recognition Tests Are Now Required To Get A New Number In China
China has recently introduced a new regulation that requires a facial-recognition test when applying for new mobile phone number. The technology ministry insisted that the measure was implemented to enhance the protection of ordinary phone users, however Chinese internet users aren’t so convinced. The regulation comes at a time when Beijing is extensively tightening its controls over the internet as a method of social control. International sites such as Facebook and Twitter have been blocked and social messaging communications are highly censored. Despite being undeniably invasive, the new regulation could also contribute to more vulnerabilities and information leakage. Chinese citizens are concerned about their privacy and human rights as the government embraces technologies to catch jaywalkers and integrate social profiling. “Gathering citizen’s information excessively like this is a violation of people’s civic rights,” one user said.
Other Reads This Week
Facebook argued to FTC there was ‘no consumer harm’ from Cambridge Analytica
Google Draws House Antitrust Scrutiny of Internet Protocol
Andrew Yang Proposes Digital Data Should Be Treated Like A Property Right
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Best,
Serafin
