A Vortex of Problems with Big Tech

 You’re reading the Benton Foundation’s Weekly Round-up, a recap of the biggest (or most overlooked) telecommunications stories of the week. The round-up is delivered via e-mail each Friday.

Round-Up for the Week of January 28 - February 1, 2019

In the last Weekly Digest, I presented a retrospective of a major policy story from 2018: The democratic harms of “Big Tech.” This week, a polar vortex accompanied a vortex of more privacy abuses from Big Tech, and further concerns about the very bigness of Big Tech.

A New Day, A New Privacy Violation

Every day this week, Benton’s Headlines Daily Digest shared news of new privacy violations by Big Tech companies, specifically Apple, Facebook, and Google. The major news: Facebook has been secretly paying users -- some as young as 13 years old -- $20 each month to install a “research app” that collected intimate information about online behavior and communications. To get the app on consumers' devices, Facebook took advantage of the Apple Enterprise Developer Program -- a program that allows companies to create apps for their own employees and offer them without first submitting to Apple for review.

Some lawmakers are not happy.

House Commerce Committee Chairman Frank Pallone (D-NJ) tweeted, “Parents warn their children to beware of strangers handing out candy. Apparently that adage should apply to Facebook too. This is one more example of why Americans need strong, comprehensive privacy law.”

Senator Ed Markey (D-MA) said, “It is inherently manipulative to offer teens money in exchange for their personal information when younger users don’t have a clear understanding how much data they’re handing over and how sensitive it is.” He continued, “Congress also needs to pass legislation that updates children’s online privacy rules for the 21st century. I will be reintroducing my ‘Do Not Track Kids Act’ to update the Children’s Online Privacy Protection Act by instituting key privacy safeguards for teens.”

“Wiretapping teens is not research, and it should never be permissible,” said Senator Richard Blumenthal (D-CT). “Instead of learning its lesson when it was caught spying on consumers using the supposedly ‘private’ Onavo VPN app, Facebook rebranded the intrusive app and circumvented Apple’s attempts to protect iPhone users.” Senator Blumenthal said that he would be sending letters to Apple and Google to probe them on their involvement by hosting the apps.

Apple, too, was not happy. The company cut off Facebook’s enterprise developer access for all of its apps, not just the offending research app.

“We designed our Enterprise Developer Program solely for the internal distribution of apps within an organization,” an Apple spokesman said. “Facebook has been using their membership to distribute a data-collecting app to consumers, which is a clear breach of their agreement with Apple.”

But Facebook wasn’t the only company taking advantage of this loophole. Google has been running Screenwise Meter, which invited users aged 18 and up (or 13 if part of a family group) to download the app by way of a special code and registration process using an Enterprise Certificate.

Google said:

Privacy Violations Or Not, Profits Were Up for Facebook

The standoff between Apple and Facebook erupted hours before the social-networking giant reported record revenues in the fourth quarter of 2018, beating analysts' expectations. Facebook’s revenue exceeded $16.9 billion. And its net income rose to $6.88 billion, from $4.27 billion a year earlier. Facebook now has 1.2 billion daily, active users and about 2.7 billion people use Facebook along with its other services, including Instagram, Messenger, and WhatsApp.

“But do that many people really use Facebook?” asked Jack Nicas this week. “While the company discloses its estimates of fake accounts, its figures have fluctuated and are confusing. Even Facebook admits its understanding of the numbers is tenuous.”

Aaron Greenspan, Facebook Co-Founder Mark Zuckerberg’s Harvard University classmate who now tracks the company, issued a report questioning how many authentic users Facebook has. Greenspan, who started a site called “the Face Book” while at Harvard and settled a trademark dispute with Facebook in 2009, said he believed the social network has far more fake accounts than it has disclosed, posing a grave risk to its business.

“Facebook has been lying to the public about the scale of its problem with fake accounts, which likely exceed 50% of its network,” Greenspan wrote. “Its official metrics—many of which it has stopped reporting quarterly—are self-contradictory and even farcical. The company has lost control of its own product.”

“The fact there are so many unexplained differences and so many gaps, it paints a picture that, when you combine all these factors together, it would indicate there’s something going on here that they’re trying to hide,” he said.

Facebook Announces Plan to Integrate Messaging Services

Zuckerberg said he plans to integrate all of Facebook’s messaging services -- WhatsApp, Instagram, and Facebook Messenger. The move requires thousands of employees to reconfigure how the services function at their most basic levels, but Zuckerberg has also ordered all of the apps to incorporate end-to-end encryption, a significant step that protects messages from being viewed by anyone except the participants in the conversation.

Reactions were mixed. On the one hand, privacy advocates viewed the expansion of end-to-end encryption as a positive move for consumer protection. “Making WhatsApp-level end-to-end encryption the standard for Facebook Messenger and Instagram would in one simple move radically improve the privacy and security of the communications of millions of people,” wrote Gus Rossi for Public Knowledge.

But others were more skeptical. 

“Good for encryption but bad for competition and privacy,” tweeted Senate Communications Subcommittee Ranking Member Brian Schatz (D-HI).

“When it comes to privacy, we can no longer give Facebook the benefit of the doubt,” said Senator Markey. “Now that Facebook plans to integrate its messaging services, we need more than mere assurances from the company that this move will not come at the expense of users’ data privacy and security. We cannot allow platform integration to become privacy disintegration.” 

“Once again, Mark Zuckerberg appears eager to breach his commitments in favor of consolidating control over people and their data,” said Senator Blumenthal. “Facebook and Google’s dominance over data has already harmed consumers and the economy. The FTC and the Department of Justice must take Big Tech’s invasive, anticompetitive practices seriously and begin to vigorously enforce our laws.”

And the calls to break up Facebook are mounting. 

Advocacy groups, led by the Electronic Privacy Information Center, wrote in a letter to Federal Trade Commission Chairman Joseph Simons that modest enforcement actions would not be adequate to curb Facebook’s privacy practices. They urged the FTC to require Facebook to divest from subsidiaries like WhatsApp and Instagram and to impose a fine of at least $2 billion on the social media giant. The wrote:

What’s Next for Big Tech and Privacy Violations?

Can competition between Big Tech keep privacy violations in check? Apple cutting off Facebook’s enterprise developer access due to its breach of agreement was seen by some as a way to police Facebook’s privacy patterns. 

Kevin Roose, writing for the New York Times, said Apple’s move was “the clearest sign yet that the cold war between Facebook and Apple over data use and privacy is heating up.” 

Roose posited that perhaps only Apple CEO Tim Cook can fix Facebook’s privacy problem. 

But there’s a problem with Roose’s position. Apple didn’t cut off Facebook due to its privacy violations -- it was because of a technicality in how the company used the enterprise loophole to distribute the research app to consumers. 

And, furthermore, can Apple be trusted with privacy protection? 

Uh… probably not. 

This week, iPhone users discovered a bug in Apple’s FaceTime video-calling application that allowed a person to hear audio from a person they were calling before the call was accepted. On Monday, a Houston attorney sued Apple, on the grounds that the company was negligent when it allowed the recording of a private deposition. 

New York State Attorney General Letitia James announced that she has launched an investigation into the circumstances of the FaceTime bug. “This FaceTime breach is a serious threat to the security and privacy of the millions of New Yorkers who have put their trust in Apple and its products over the years,” James said. “New Yorkers shouldn’t have to choose between their private communications and their privacy rights.”

Senator Amy Klobuchar (D-MN) called the bug “a clear violation of consumers’ privacy protections and a reminder of why we need comprehensive privacy legislation.”

Conclusion: A Privacy Showdown Ahead? 

All signs point to lots of policy debates over the privacy violations of Big Tech in 2019. Whether those debates turn into meaningful privacy legislation will be one of the main telecommunications policy stories in 2019. 

And Facebook seems to be preparing.  

On Tuesday, Facebook said it had hired three veteran privacy activists to “bring in new perspectives to the privacy team at Facebook, including people who can look at our products, policies and processes with a critical eye," according to Rob Sherman, Facebook’s deputy chief privacy officer. The hires include:

• Nate Cardozo, an attorney with the Electronic Frontier Foundation, who has been very publicly critical of the company in recent years.
• Robyn Greene, senior policy counsel with the Open Technology Institute.
• Nathan White, senior legislative manager for  Access Now.

The vortex of problems with Big Tech rolls on. And we'll be covering it. 

For all the news over how policy can protect consumer privacy and serve the public interest, be sure to subscribe to our Headlines Daily Digest newsletter. 

Quick Bits

• Geoffrey Starks sworn in as FCC Commissioner, Announces Staff (FCC)
• Justice Department charges Huawei with fraud, ratcheting up US-China tensions (Washington Post)
  • See Also: T-Mobile is at the center of the DOJ’s allegations against Huawei (Fierce)
• Broadband Industry Urges Judge To Invalidate Vermont Net Neutrality Law (MediaPost)
• C Spire forms consortium to bridge digital gap in rural areas (Fierce)
• FCC Reschedules February 2019 Open Meeting and Announces Tentative Agenda (FCC)

Weekend Reads (resist tl;dr)

• Net neutrality court case preview: Did FCC mess up by redefining broadband? (ars technica)
• Broadband Providers Are Quietly Taking Advantage of an Internet Without Net Neutrality Protections (Public Knowledge)
• Prisons Across the US Are Quietly Building Databases of Incarcerated People's Voice Prints (The Intercept)
• Your digital identity has three layers, and you can only protect one of them (Quartz)
• From fake news to enemy of the people: An anatomy of Trump's tweets (Committee to Protect Journalists)

ICYMI from Benton

• Brandeis: An Emphasis on Facts, Jonathan Sallet
• CenturyLink and Frontier Miss FCC Connect America Fund Broadband Deployment Milestones, Keving Taglang
• Providing Broadband to Rural America: How Educators with EBS Can Make the Difference, Fritz Erickson
• 2018: A Turning Point for "Big Tech", Robbie McBeath
• South Bend Hires New Innovation Chief -- Benton Fellow Denise Linn Riedl, South Bend Tribune

Events Calendar for February 4-8, 2019

Feb 5 -- The Great Airwaves Robbery II, New America panel

Feb 6 -- Winning the Race to 5G and the Next Era of Technology Innovation in the United States, Senate Commerce Committee hearing

Feb 6 -- Senate Commerce Committee Executive Session

Feb 7 -- Preserving an Open Internet for Consumers, Small Businesses, and Free Speech, House Communications Subcommittee hearing

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