April 2014

When ‘Liking’ a Brand Online Voids the Right to Sue

General Mills, the maker of cereals like Cheerios and Chex as well as brands like Bisquick and Betty Crocker, has quietly added language to its website to alert consumers that they give up their right to sue the company if they download coupons, “join” it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways.

Instead, anyone who has received anything that could be construed as a benefit and who then has a dispute with the company over its products will have to use informal negotiation via email or go through arbitration to seek relief, according to the new terms posted on its site. In language added on April 15 after The New York Times contacted it about the changes, General Mills seemed to go even further, suggesting that buying its products would bind consumers to those terms. The change in legal terms, which occurred shortly after a judge refused to dismiss a case brought against the company by consumers in California, made General Mills one of the first, if not the first, major food companies to seek to impose what legal experts call “forced arbitration” on consumers.

Privacy concerns? What Google now says it can do with your data.

Google quietly updated its terms of service, spelling out just how much personal data it mines as part of its normal business model. While corporate fine-tuning to an online policy that few users read closely – indeed, most don’t read at all – would not normally be news, Google is singular, say security and legal experts. Not only is the company in the midst of contentious lawsuits over both the spirit and letter of these privacy issues, but, more important, it dominates the online search space to such an extent that what happens at Google impacts the entire cyber-landscape. The revisions to the terms of service spotlight the degree to which Google considers anything you upload to any of its various services (YouTube, Google plus, etc.) to be fair game.

Make smartphone kill switches automatic

[Commentary] The wireless industry is taking an important step in bowing to public pressure by requiring kill switches to disable stolen smartphones. But the move doesn't go far enough to protect the public against a growing crime category that can turn violent. The announcement comes with a hitch. A device owner will have to opt in or actively sign up for the kill switch to put it to work. That's a drawback that won't solve the problem and will keep phone makers and carriers in the lucrative game of selling theft insurance and replacement devices. A better way -- one contained in a pending state measure -- would have the feature on duty automatically with no onus on the owner to activate it. The public wants and deserves a protective measure well within the reach of these tech giants.

Rising Costs Erode Google Profits

Fast-rising expenses eroded Google's first-quarter profits, disappointing investors and sending Google shares lower in after-hours trading. The company said revenue for the quarter rose 19% to $15.4 billion from $13 billion a year earlier, excluding the Motorola Mobility business Google plans to sell to China's Lenovo Group. But expenses grew faster -- at 23%. As a result, Google's net income increased 3% to $3.65 billion, or $5.33 a share, from $3.53 billion, or $5.24 a share. Brian Wieser, an analyst at Pivotal Research Group, said Google's profit margins have declined as the company expands into more businesses. Newer businesses like online-video service YouTube, as well as display advertising, are less profitable than the company's original search-advertising business, Wieser said. Operating expenses rose in part because of one-time research-and-development costs related to Google's $3.2 billion purchase of home-automation company Nest Labs. Research-and-development expense increased 31% from a year earlier to $2.1 billion. Google also is increasing investments in data centers and other infrastructure to beef up its computing capacity. Capital spending nearly doubled from a year earlier, to $2.3 billion from $1.2 billion.

Internet makes global economy vulnerable to Lehman-like crash, study says

The global economy is entering phase of heightened vulnerability to digital disruption -- a threat likened to the US mortgage crisis, which was largely hidden until its dramatic collapse in 2008, a new report warns.

The report suggests larger dangers are lurking beyond headlines of cyber-espionage, crime, and cyber-weapons development. For one, the fast-rising dependence on outsourcing key operations to cloud Internet Service Providers could result in cascading problems that cause a far broader or longer-lasting crash. “The internet is highly interconnected and tightly coupled with society, meaning that (as in other such systems) a small failure or series of them in one place can cascade, producing an outsized impact elsewhere,” according to the study by the Atlantic Council, a national security think tank, and Zurich Insurance Company. “While our society’s reliance on the internet grows exponentially, our control of it only grows linearly.” Other reports have raised similar concerns.

US Views of Technology and the Future

The American public anticipates that the coming half-century will be a period of profound scientific change, as inventions that were once confined to the realm of science fiction come into common usage. This is among the main findings of a new national survey by The Pew Research Center, which asked Americans about a wide range of potential scientific developments -- from near-term advances like robotics and bioengineering, to more “futuristic” possibilities like teleportation or space colonization.

In addition to asking them for their predictions about the long-term future of scientific advancement, we also asked them to share their own feelings and attitudes toward some new developments that might become common features of American life in the relatively near future. Overall, most Americans anticipate that the technological developments of the coming half-century will have a net positive impact on society. Some 59% are optimistic that coming technological and scientific changes will make life in the future better, while 30% think these changes will lead to a future in which people are worse off than they are today.

Turkey Greets Twitter Delegation With List of Demands

Prime Minister Recep Tayyip Erdogan of Turkey has called Twitter “the worst menace to society” and a tool of foreign conspirators. For good measure, he has also accused it of evading taxes. After ordering the social media site to be blocked in March, he reluctantly turned it back on for Turkey’s millions of Internet users two weeks ago, only because the country’s highest court demanded that he do so. But his office has stopped posting Twitter messages in his name, even though he has 4.2 million followers, almost as many as the White House.

That was the atmosphere that a delegation of Twitter officials stepped into when it arrived in Ankara, the capital, this week for a series of meetings with Turkish officials to smooth things over. The Turks came to the table with a list of demands: that Twitter open an office in Turkey, that it reveal the identities of those posting leaks from a continuing corruption investigation, and that it pay taxes on revenue it earns from advertising in Turkey. Twitter agreed to prevent some posts from being seen in Turkey, although they will still be viewable in other parts of the world. It will not, however, open an office in Turkey, although it did appoint a local representative to handle complaints from the Turkish government. The company did not comment on the government’s request for user identifications, but in the past, Twitter has refused to provide Internet data that would allow a government to identify a user. It also said it would pay taxes applicable to an affiliate that sells advertising for Twitter in Turkey.

In Germany, Strong Words Over Google's Power

A trans-Atlantic war of words -- and profits -- over the future of the Internet heated up when the head of Germany’s largest publisher admitted that “we are afraid of Google” and suggested that European authorities were colluding with the company to develop a “business model that in less honorable circles would be called extortion.”

Mathias Döpfner, the chief executive officer of Axel Springer, lashed out after the Google chairman, Eric E. Schmidt, mounted a spirited defense of Google’s practices and charged that “heavy-handed regulation” in some places “risks creating an innovation desert in Europe” that would ultimately threaten its well-being. Schmidt’s remarks, published in the German media, were themselves a response to an attack by another German Internet entrepreneur, Robert M. Maier, who founded the Berlin start-up Visual Meta in 2008 and sold a majority stake to Springer in 2011, and published a long article titled “Fear of Google” on April 3. “We are afraid of Google,” Döpfner wrote. “I must say this so clearly and honestly since scarcely one of my colleagues dares to do this publicly. And as the biggest of the small fry, we must perhaps be the first to speak plainly in this debate.”

Jean-Claude Juncker seeks to open door for EU telecoms deals

Europe’s telecom companies could soon be getting what they have long been begging for: looser European Union competition rules that would finally allow them to consolidate and boost profitability. Jean-Claude Juncker, a leading candidate to become the next European Commission president this year, said the EU had to rethink its competition rules for the digital sector to allow dealmaking to occur more freely across the bloc.

Speaking during his European-wide campaign trail in Finland, Juncker said: “A first thing we should do is rethink the application of our competition rules in digital markets.” Opening the door to consolidation in the fragmented European telecoms market would be key for the industry, which has repeatedly lobbied the commission for an easing of competition rules.

It is time to let our phones roam free

[Commentary] Large roaming bills are a problem wherever you travel, but it is particularly absurd within the European Union.

As EU citizens, we can travel freely from one country to another -- but our phones have to behave like furtive illegals, terrified of what might happen if they attempt to do any useful work. Even receiving a call while abroad can incur a charge you would not have to pay at home. Who caused this roaming problem? It was a combination of populist politicians, short-sighted companies and an overriding hypocrisy. The hypocrisy is that the EU is meant to be a single market but even the most European-minded governments refuse to allow it to behave like one. There are 28 regulators -- one for each EU member -- and 28 systems of allocating spectrum. So mobile phones, which hop borders as easily as birds, are subject to 28 regimes.

Until now, EU politicians have dealt with this by setting maximum prices for calls and texts, as well as for each megabyte of data downloaded. This helps, but it is as absurd for a free-market community of nations to resort to price capping as it is for phones to have to adjust to each change of border. This month, the European parliament voted to end roaming charges entirely by 2016. This still has to be approved by EU governments, but, with elections coming up next month, it reeks of populism. Ending roaming charges by fiat will probably result in operators threatening to cut investment. The mobile phone companies spend too much time moaning about politicians’ behaviour and too little setting out a bold vision of their own. The reason regulators are reluctant to allow consolidation is that it would limit competition within each EU country, which comes back to the absence of a single market. Further EU integration is not popular at the moment, but this is an area where consumers could be convinced it would make life easier for them.

Benton

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