200.74 -0.60 (-0.30%)
Pre-market: 4:02AM EST
|Bid||0.00 x 900|
|Ask||0.00 x 900|
|Day's range||200.21 - 203.14|
|52-week range||123.02 - 208.66|
|Beta (3Y monthly)||1.06|
|PE ratio (TTM)||32.19|
|Earnings date||28 Jan 2020 - 3 Feb 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||238.02|
(Bloomberg) -- A Democratic member on the U.S. Federal Trade Commission urged states investigating Facebook Inc. to examine whether the company disregarded earlier promises to protect privacy in order to perpetuate its dominance in violation of antitrust laws.“Now, the ball really is in your court,” Commissioner Rohit Chopra told state attorneys general meeting in Washington on Monday. The company faces an inquiry by 45 states who are looking into both competition and data-protection issues, as well as an FTC antitrust investigation and a potential Justice Department probe.Facebook agreed in July to pay $5 billion and add a privacy committee to its board of directors to settle FTC’s claims that it mishandled privacy. Chopra dissented saying the settlement didn’t go far enough. The separate antitrust probe is ongoing.Chopra, an outspoken critic of settlements at the FTC approved along party lines and concentration of corporate power, said he became convinced during the agency’s investigation that Facebook’s privacy violations were done so it could pursue its dominance of social media.“I don’t care what letter is next to your name, we have to all be working together shaping remedies that actually work,” Chopra said, referring to the Republican and Democratic attorneys general in the room.Facebook, which had 2.45 billion monthly active users as of September, didn’t immediately respond to a request for comment. The company says it faces robust competition, and privacy and antitrust issues should remain separate.Data protection and competition have traditionally been distinct areas of law, but some academics and enforcers have insisted that the two issues may have significant overlap for tech giants, particularly Facebook, which harvests data to power its massive and profitable ad-targeting business.”We think that it’s worth looking deeper, so we’re very engaged in that deeper investigation,” California Attorney General Xavier Becerra said in an interview.What Bloomberg Intelligence SaysMany bridges must be crossed before any possible findings that unlawful conduct has occurred. Monopolization is a legal term of art and rigorous standards must be met for liability to be found. Remedies, if needed, would likely be narrowly tailored conduct changes\-- Jennifer Rie, Senior Analyst: LitigationFor a full report click hereOne of the Republican commissioners, Christine Wilson, pushed back at Chopra at the same event, saying provisions in the settlement that require Facebook executives to sign off regularly on privacy practices were already changing the company.“It is having the effect of focusing not only managements’ minds but also those of the employees,” said Wilson, who voted for the settlement.Facebook’s Chief Executive Officer Mark Zuckerberg is now “on the hook” and in danger of civil and criminal penalties if he deviates from the accord, Wilson said.Some states, including California and Massachusetts, have issued subpoenas or sued Facebook for documents, suggesting the company “has a lot to hide,” Chopra said. He reiterated that the FTC should have interviewed Zuckerberg during its privacy probe.“I hate seeing the FTC conclude an investigation and we still have states working their butts off to get the information that I think we should have gotten,” he said.\--With assistance from Daniel Stoller.To contact the reporters on this story: Ben Brody in Washington, D.C. at email@example.com;Erik Larson in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, Joe Schneider, Peter BlumbergFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- For Li Mo, the footage of black-clad people clashing with police and vandalizing storefronts proved the final straw. The images of Hong Kong protesters fighting for greater autonomy from Beijing incensed the mainland-born postgraduate student and she could no longer remain on the sidelines. So, she joined China’s fangirl army.Ever since anti-government demonstrations in Hong Kong turned violent this summer, China’s celebrity-obsessed young generation have patrolled Facebook, Twitter and Weibo, ready to pounce on perceived slights and defend their motherland. Nicknamed “fangirls” because they exhibit the same fervor most often reserved for pop-culture icons, these women and men flood social media with slogans and memes shaming brands -- sometimes with far-reaching consequences.Fangirls called out Houston Rockets General Manager Daryl Morey for supporting Hong Kong protesters, prompting China’s state broadcaster to drop National Basketball Association games. They triggered boycotts of brands from Coach to Apple. Many got swept up by Facebook and Twitter account takedowns. And in a recent incident, the onslaught of vitriol they directed at Hong Kong pop-star Joey Yung forced her to apologize for a single Facebook selfie, but not before she got canned from a high-profile gala.The Hong Kong unrest spurred Li into action. She quickly picked up typical fangirl behavior -- endlessly liking and re-posting trending anti-protest diatribes on Weibo for example -- encouraged that hundreds of thousands shared her values. “I couldn’t remain silent any longer,” the 28-year-old said. “I don’t idolize anyone, I only idolize China.”Read More: Moment of Truth on China Is Coming for Rest of Corporate AmericaWhile many Westerners, particularly Americans, see China’s citizens as forced into supporting Beijing or muzzled from expressing their true feelings, fangirls suggest more earnest and resilient backing for their country’s government. They show how large pockets of China’s youth are rising up to defend their country against what they perceive as mistreatment and misrepresentation by outsiders, and they underscore a growing sentiment that’s shaping how China interacts with the world.China’s government has increasingly taken its propaganda efforts overseas, but fangirls’ deep convictions set them apart -- and perhaps make them more potent -- from often wooden, state-sponsored online commentators. Known as wumao, or the “50-cent army,” those bloggers are named after the amount they are said to make from each patriotic posting.The emergence of fangirls comes at a time Beijing is trying to engage younger Chinese by using rap music, cartoons and chat-app stickers to deliver Communist Party ideology. Homegrown corporations like Tencent Holdings Ltd. often aid such efforts. A system of education that often stresses the humiliation China suffered at the hands of foreigners also prepared the ground for their rise.They’re also the latest online patriots to hop the Great Firewall dividing the internet in mainland China from the rest of the world -- with a decidedly millennial twist. They call their nation “Brother Ah Zhong” (Brother China), describing it as a pop idol who debuted 5,000 years ago and now boasts a fan base of 1.4 billion.Fang Kecheng, assistant professor of communication and journalism at the Chinese University of Hong Kong sees state influence working hand-in-hand with young nationalist netizens, including fangirls who take note of the narrative on state media, then act upon it. “That’s not to say they are entirely manipulated, or being passively used as a tool,” he says. “There are things they’re searching for, such as a common identity and the ability to express their opinions.”Read More: Here’s What China Is Telling Its People About Hong Kong ProtestsJack Zhou, a 20-year-old hair stylist in central China, is one of a score of volunteer leaders of a 20,000-strong fangirl community. People like him help focus and channel raw emotions that often threaten to spill out of control. In between haircuts, he monitors a chat group of 400 users on messaging app QQ. Participants are charged with spawning content for the group’s main Weibo account. One of their latest productions is a three-minute video showcasing protester violence in Hong Kong, from setting a man on fire to ganging up on a police officer and trying to snatch his pistol. They called on those who can access sites like Facebook and YouTube to share the clip, which has English captions. “Let the world know the truth,” is their slogan.Zhou’s group has participated in several major online crusades to defend Beijing’s line on Hong Kong over the past three months, he said. They spammed Instagram accounts of pro-Beijing celebrities with emojis of the Chinese flag, infiltrated Facebook live streams to clash with pro-democracy sympathizers, and plastered Communist Party slogans on the sites of news outlets from CNN to the Washington Post. Their hard work paid off when the Communist Party’s Youth League and state media came out in praise of the campaigns, he said.Read More: China Celebrities Help Fan New Generation of NationalistsTheir motivations are widely misunderstood, said Zak Dychtwald, author of Young China: How the Restless Generation Will Change Their Country and the World. English-language media writing off Chinese pride as a product of propaganda and brainwashing only fans the flames of nationalism, he said. “There’s ardent pride in the country and fangirls want to defend it,” he added. “The energy and sentiment driving the movement in China is genuine.”Zhang Dong, 30, emigrated to Laos in 2013 to work as a tour guide after he graduated from college in China. Only then did he understand how the world depicts his country in such a “horrible” manner. Every day, he churns out dozens of posts on the accounts he registered for the purpose of discrediting Hong Kong’s protesters. He’s called them “cockroaches,” “traitors,” and “HKIS,” juxtaposing images of them with Islamic State terrorists. There’s “essentially no difference” between the two groups, he said.Zhang is proud of his independence. “I’ve never received any money from the Communist Party,” said Zhang. “If we were wumao, the Chinese government would have owed us hundreds of millions yuan by now.”Fangirls represent another front in social media giants’ efforts to curb disinformation campaigns. In August, Twitter suspended nearly 1,000 accounts originating from China, which the company identified as part of a state-backed operation to undermine Hong Kong’s protests. Facebook and Google took similar action. That take down didn’t have a lasting effect as new accounts emerged to replace those that were removed, a study from social media research firm Astroscreen shows.Read More: How Fake News and Rumors Are Stoking Division in Hong KongFangirls like Trista Wang say they have been unfairly targeted by these platforms. “Just one Chinese flag can get your account suspended,” said Wang, a traditional Chinese medicine therapist in the port city of Qingdao. She insists Facebook is biased toward Chinese patriots like her, pointing to Chief Executive Officer Mark Zuckerberg’s recent China-bashing remarks. “I used to have good feelings about Zuckerberg,” Wang said.A Facebook representative said the company only removes content that violates its community standards. In response to inquiries on two specific fangirl accounts that were disabled or restricted, the representative pointed to policy violations in relation to the use of fake identities, bullying and harassment. A Twitter representative said it acts against accounts for policy breaches but declined to comment on individual examples citing privacy and security reasons.Fangirls could disappear as fast as they emerged. That’s because nationalist movements are always a double-edged sword for the government, said Chinese University’s Fang. “When something self-organizes to a certain size, it becomes a taboo -- even if it’s only online.”Or they could morph into something more alarming. Zhou, the volunteer leader, has already become a kind of online vigilante, notifying the police about a China-based Weibo user expressing support for Hong Kong. He said he was content that the police quickly identified and arrested the blogger. “We must rally all the forces we can to eradicate the soil that breeds Hong Kong separatists,” he said.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc. is officially returning to the Las Vegas CES technology conference for the first time in decades to discuss its stance on consumer privacy -- rather than pitch a new hardware product.The company’s senior director of privacy Jane Horvath will be speaking on a “Chief Privacy Officer Roundtable” on Jan. 7, according to the CES agenda.Horvath, along with executives from Facebook Inc., Procter & Gamble Co., and a commissioner from the Federal Trade Commission, will discuss how companies build privacy at scale, regulation and consumer demands.Apple’s last major official appearance at CES was in 1992 when then Chief Executive Officer John Sculley gave a presentation at a Chicago version of the summit to introduce the failed Newton device.More recently, Apple’s technology has influenced CES despite the company not officially presenting. It made news last year for a privacy billboard during the Vegas event that exclaimed, “What happens on your iPhone, stays on your iPhone.” Samsung Electronics Co. and LG Electronics Inc. also touted Apple launching video streaming directly on third-party TVs.Each year, accessory makers fill the CES exhibit halls with cases and other peripherals for Apple devices. Behind the scenes, Apple managers roam the halls to identify future technology and scan the competitive landscape, while members of Apple’s supply chain team meet with component makers to potentially source parts for future devices.While Apple has taken a backstage approach to the conference, rivals including Google, Microsoft Corp. and Amazon.com Inc. have used the event to promote their latest voice-based products, spur interest from potential partners and try to beat Apple to the punch ahead of major product announcements.To contact the reporters on this story: Mark Gurman in Los Angeles at firstname.lastname@example.org;Ed Ludlow in San Francisco at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Ben Rains dives into Lululemon (LULU) and Nike (NKE) to see if investors should consider buying either stock with the sportswear retailers set to report their quarterly results soon...
(Bloomberg) -- New York is becoming more of a global technology hub, as industry giants tap into the workforce of a region long known as a banking and media stronghold.News late last week that Amazon.com Inc. signed a lease for 335,000 square feet in the Hudson Yards area comes as Facebook Inc. is gobbling up more space nearby. Google, meanwhile, is expanding beyond its base in Chelsea.About 10 months after Amazon abandoned plans for a second headquarters in New York, the technology industry is creeping up on financial services as the top employer in the Big Apple. Facebook and Google, which aims to double its presence in New York over the next decade, are now among the top office tenants in Manhattan, joining the likes of JPMorgan Chase & Co. and Citigroup Inc.“We know they’re not done yet,” Marc Holliday, Chief Executive Officer of SL Green Realty Corp., Amazon’s new landlord at 410 10th Ave., said during an investor presentation on Monday. “These West Coast companies are migrating to the East Coast in order to tap in to an expanded workforce that doesn’t really exist to the same degree in Silicon Valley.”Even before recent leases by Amazon and Facebook, tech, advertising, and media tenants, known as TAMI, had grown to represent about 24% of Manhattan’s office space, compared with 31% for financial services, according to Cushman & Wakefield. That gap was much wider in 1990, when banks and finance firms accounted for almost 50% of the office market.Amazon’s new offices can fit more than 1,500 workers and are slated to open in 2021. The deal is a key signal that the company is committed to growth in New York, even without the tax incentives that were proposed to draw a second Amazon headquarters to Long Island City. Those plans were abruptly abandoned earlier this year amid public criticism of the project.Then there’s Facebook. The company signed a lease last month for more than 1.5 million square feet across three buildings at Hudson Yards, and is reportedly in talks to take over the Farley Building, a former post office across Eighth Avenue from Penn Station that will have 740,000 square feet of office space.The real estate industry has long tried to position New York as the next Silicon Valley. And while skeptics have argued it can’t challenge San Francisco, a talented pool of workers and boom in venture capital are pushing tech firms to expand in Manhattan.Earlier this year, the real estate brokerage Savills Plc ranked New York first among 30 global tech cities, driven by the growing volume of venture capital cash and talent pool.Venture capital had been a “missing ingredient for putting New York on the tech map,” SL Green’s Holliday said.“You’ve got a bunch of tech companies across the country that are looking for talent and fighting a war for talent against their local competitors,” said Ken McCarthy, an economist at Cushman & Wakefield. “One way to tap into that is to come to other markets like New York.”To contact the reporter on this story: Natalie Wong in Toronto at email@example.comTo contact the editors responsible for this story: Craig Giammona at firstname.lastname@example.org, Christine MaurusFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Andreessen Horowitz is lauded today as one of the most influential and innovative firms in venture capital. But when it started a decade ago, the approach taken by co-founders Marc Andreessen and Ben Horowitz, this week's guest on Masters in Business, was derided as “crazy.” At the time, in the midst of the 2009 financial crisis, Horowitz was told “nobody needed yet another venture capital firm.” But they pushed ahead anyway. The result was firm that disrupted the Silicon Valley disruptors. Today, A16Z (as it is known) has $12 billion in assets under management across multiple funds. It was an early investor in startups such as Facebook, Airbnb, Lyft, Groupon, Twitter, Pinterest, Box and many more.Horowitz also credits the firm’s general partners, most of whom came of age in technology as founders, operators, chief executive officers or chief technology officers. He describes their experiences building successful companies as “crushingly hard,” and very much influencing the firm's thinking about startups. His latest book is “What You Do Is Who You Are: How to Create Your Business Culture.” His first book was “The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers.” His favorite books can be seen here; a transcript of the conversation is here.You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.Next week, we speak with Peter Mallouk, CEO of Creative Planning Inc., a $46 billion investment advisory firm, and author of "The 5 Mistakes Every Investor Makes and How to Avoid Them."To contact the author of this story: Barry Ritholtz at email@example.comTo contact the editor responsible for this story: James Greiff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Global TV advertising sales fell almost 4% in 2019, the steepest drop since the depths of the economic recession in 2009, in the latest sign that advertisers are following viewers to the internet.Declines in TV viewership have suppressed the medium’s advertising dollars, according to research firm Magna Global, which released the data as part of report on the global ad business. Viewership fell sharply in Europe, compounding the trend in the U.S., China and Australia.Traditional television has hemorrhaged viewers in recent years, as people trade cable and satellite packages for online services Netflix and YouTube. Cord cutting has been especially pronounced in the U.S., the world’s largest media market, and should continue to accelerate as media giants Walt Disney Co. and AT&T Inc. introduce their own streaming services.Even with the retreat from TV, overall ad revenue climbed for the 10th year in a row. The industry was buoyed by digital sales, which rose 15%.The TV business had previously eked out gains in advertising sales by charging higher prices. And it’s still seen as a useful medium when marketers need to reach a large, live audience. Technology companies excel at allowing advertisers to target individuals who have searched for a sweater on Google, liked a movie’s page on Facebook or looked for detergent on Amazon.Yet declines in viewership now outpace the rise in TV ad pricing. So-called linear TV viewership has been declining by 10% in the U.S., Australia and China for a few years, according to Vincent Letang, the author of the report. European TV channels suffered drops of 7% to 8% among viewers age 18 to 49, worse than the 5% decline last year.Worldwide Decline“Almost everywhere now, we have linear viewing declining double digits, or high single digits,” Letang said in an interview. He blamed the proliferation of streaming services, which took hold in Europe a few years later than in the U.S., as well as the slowing economies in the region.U.S. TV ad sales will return to growth in 2020 thanks to the Summer Olympics and the presidential election, but that is a temporary boost.The TV industry isn’t the only one suffering. Technology companies Google and Facebook Inc. have siphoned advertising dollars away from print publications and radio in recent years. Online companies garnered more than half of global advertising sales in 2019 for the first time, accounting for $306 billion of the $595 billion spent globally.Radio advertising sales stabilized in 2019, while the out-of-home category -- namely, billboards -- was the only traditional media to actually grow. That’s due in part to technology companies, which use billboards to tout their services. Facebook, Apple, Amazon, Netflix and Google all rank among the 20 largest out-of-home advertisers.To contact the reporter on this story: Lucas Shaw in Los Angeles at email@example.comTo contact the editor responsible for this story: Nick Turner at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- If it’s true that the leak of trade negotiation readouts between the U.K. and the U.S. was part of a Russian influence operation, it’s the third such document dump ahead of a major nation's election in as many years. This has created a new knee-jerk reaction among affected politicians: Blame the Russians to dismiss the leak. It would be more responsible on the part of political leaders to deal with the substance of the documents — especially since none of the three dumps has been particularly damaging. It goes without saying in today’s almost borderless world that foreign powers will have favorites in important countries’ elections. Democratic countries may try to subtly influence the vote through statements, winks and nudges; Russia seems to take a different approach. In this case, voters may have at least been given more information about their choice than the government was prepared to share. At the weekend, Reddit, the discussion website, said it believed that a post from a month ago, containing links to the trade negotiation documents, “was part of a campaign that has been reported as originating from Russia.” The tortured phrasing reflects the difficulty of proving something like this. Researchers can only rely on similarities with previous campaigns. In the case of the Reddit post by a user going by the moniker Gregoratior, the connections first were made by Ben Nimmo, director of investigations for the social network analysis firm Graphika, in a report published earlier this month. Nimmo wrote that the post was amplified, using disposable “burner accounts,” on a number of German- and English-language sites also used in an operation discovered by Facebook earlier this year, dubbed Secondary Infektion. It involved planting and boosting false stories meant to sow discord in Western societies: anti-immigrant ones, those pitting Germany or the U.K. against the U.S., those stoking religious tensions in Ireland. As during that effort, linked to Russia because of typical English grammar errors and alignment with Russian geopolitical interests, links to the Reddit post were tweeted directly at journalists and politicians to get the leak noticed.The timing of the U.K. document dump, just before a U.K. national election, brings to mind two other leaks also attributed to Russian intelligence services: The Wikileaks publication of emails stolen from John Podesta, chairman of Hillary Clinton’s U.S. presidential campaign in 2016, and the dissemination of emails lifted from Emmanuel Macron’s 2017 election campaign in France through the 4chan message board popular with the U.S. alt-right. Both have been linked to Russia — the U.S. one, ultimately, by Special Counsel Robert Mueller, the French one by cybersecurity firms. It makes sense that Russia should be stoking tensions ahead of the U.K. election. Its propaganda machine and troll armies have agitated for Brexit; indeed, Prime Minister Boris Johnson has suppressed a parliamentary report on Russian interference in U.K. politics until after the election, possibly because it could reveal embarrassing links between Brexiters and Russia. But now that Johnson’s Conservatives lead in the polls, making Brexit likely to happen, it benefits Russia to add fuel to the U.K. domestic political fire by weighing in on the other side — that of Labour leader Jeremy Corbyn, an advocate of a less adversarial relationship with Russia. Corbyn, indeed, has embraced the leaked documents, saying they show the U.K.’s vaunted National Health Service will be “for sale” to Americans after Brexit as part of a one-sided trade deal. In the U.S., the Clinton campaign’s response to the Podesta emails consisted of blaming Russia and refusing to comment on individual emails. In France, the email dump was released just 24 hours before the election, so nobody had the time to delve into their contents. The Macron campaign commented that the dump was an attempt at “democratic destabilization, like that seen during the last presidential campaign in the United States.” Johnson’s response? A promise to investigate the leak while broadly dismissing its substance.Drawing attention to leaked documents’ provenance is a cop-out. It’s the duty of intelligence and law enforcement agencies to investigate leaks and work out why sensitive data weren’t protected. And it’s up to experts to thrash out whether Russian intelligence actually stole the documents or Russian trolls merely helped get them noticed. The two situations require different security responses. On another level, it’s worth discussing what goals the Kremlin might be pursuing in either case and whether some sort of policy or diplomatic response is needed.But ultimately, when the documents are genuine and not tampered with, as both the Podesta emails and the U.K. trade documents appear to be, the politicians on the receiving end of the damaging material must react to its substance — or be seen as dishonest.The Clinton campaign should have figured out how deal with the revelations from the emails so that Donald Trump couldn’t turn his campaign into an anti-corruption one. Blaming Russia didn’t really help. Johnson, for his part, should be able to reassure British voters that he’s not about to pull the country into some kind of common market with the U.S. on American terms — that he’s not about to lower food safety standards, for example, or privatize the U.K. health care system to let U.S. pharmaceutical companies sell medication to Britons at higher prices. He’s repeatedly denied these things on the campaign trail, but brushing them off as akin to photos purporting to show a UFO isn’t engaging with the substance. Clinton probably thought she could dodge the issues and still win. Johnson’s poll lead likely gives him similar ideas, though he has been more conscious of the way claims about compromising the NHS cut through to voters. He may well have done enough to assuage concerns for now. But at the end of the day, political opponents and the public never quite forget revelations left unanswered, and the questions will not go away even if he manages to sweep them under the rug and come out on top this time.To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Therese Raphael at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Amazon.com Inc.’s bid to buy into one of the U.K.’s most successful startups may get caught up in antitrust authorities’ fear that they made mistakes in the past.The Competition and Markets Authority has until Wednesday to decide whether to continue a two-month-old probe that froze Amazon’s bid of around $500 million for a minority stake in food-delivery service Deliveroo.“The CMA is very interested in tech giants extending their tentacles into other markets,” said Alan Davis, a competition lawyer at Pinsent Masons in London. Antitrust regulators “are paranoid about it at the moment because they are concerned they have not looked at these mergers enough in the past, like Facebook-WhatsApp.”Authorities were put off over Facebook Inc.’s change of position on how it handled data from WhatsApp, prompting EU officials to accuse the company of misleading them to win approval for the takeover in 2014. Big Tech is a flash point now for antitrust across the globe. In the U.S., there are probes into Google, Facebook and Amazon over allegations they unfairly hinder competition. The CMA is investigating how Google plans to use Looker Data Sciences Inc. data before approving that $2.6 billion takeover.While the CMA’s mission is in part to ensure big deals won’t hamper competition, it doesn’t usually investigate bids for minority stakes. It may have been moved to act this time because of Amazon’s access to an unending reservoir of data from its many businesses. And CMA’s Chief Executive Officer Andrea Coscelli has said that it was a mistake to allow deals like Facebook’s purchase of Instagram.“U.K. regulators may have some antitrust concerns with the proposed investment,” said Bloomberg Intelligence analysts Aitor Ortiz and Diana Gomes. “One of them could be whether Amazon could get access to Deliveroo’s user data, leveraging the delivery giant’s position in other markets besides on-demand restaurant delivery, such as online groceries.”Amazon, Deliveroo and the CMA declined to comment on the matter.Cut-Throat CompetitionThe food-delivery business is no stranger to the regulator’s attention. Two years ago the agency began investigating Just Eat Plc’s merger with a smaller rival Hungryhouse, eventually allowing it to go through because of the competition in the sector.Since then the delivery business has seen a wave of acquisitions and international expansion. Just Eat agreed to a 5 billion-pound merger ($6.6 billion) with Dutch firm Takeaway.com NV in July, while Uber Technologies Inc. was reported to be showing interest in Spanish startup Glovo. However, according to food-service consultant Peter Backman, competition in the sector remains strong.“It’s getting more intense because the pressure to get scale is becoming more intense,” said Backman, a former director of Horizons FS. “Although the market has gotten bigger, they are under huge pressure to become profitable.”Deliveroo has never turned a profit, losing 232 million pounds last year despite a 72% increase in global sales. A ruling against Amazon would be a setback for the U.K. company, which has already raised $1.53 billion in investor funding.In August, it was forced to make an abrupt retreat from Germany after struggling to get a grip on the market.For Amazon, the stakes aren’t as high, but if the CMA decision goes the wrong way, it faces yet another embarrassing exit from a market it has found difficult to crack. It closed its own U.K. food delivery unit Amazon Restaurants U.K. in December 2018, with its American counterpart following suite last summer.To contact the reporter on this story: Eddie Spence in London at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Christopher Elser, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. French Finance Minister Bruno Le Maire urged the U.S. to support a global overhaul of how the digital economy is taxed.Treasury Secretary Steven Mnuchin has said the U.S. supports the efforts of the Organisation for Economic Co-operation and Development, but he has suggested the first part of the OECD’s plan should be optional. Le Maire said on Sunday that this proposal “won’t work.”The U.S. needs to show “good faith” in the talks, Le Maire said on France 3 television, calling on Washington to back the plan that’s on the table. If no global deal can be reached, Europe will restart talks on introducing its own tax, he said.Read more: Why Digital Taxes Are the New Trade War Flashpoint: QuickTakeThe debate over how to tax big tech companies is heating up, with the U.S. threatening to impose tariffs on about $2.4 billion of French products in retaliation for a new French digital levy. Washington maintains that the tax will discriminate against U.S. companies, including tech giants such as Facebook Inc. and Amazon.com Inc.Le Maire said the French tax isn’t discriminatory, because it also hits European and Asian companies. Any retaliatory tariffs would have no legal basis, and France is prepared to fight them in the World Trade Organization if necessary, he said.“This is uselessly aggressive toward France,” Le Maire said.To contact the reporter on this story: Helene Fouquet in Paris at email@example.comTo contact the editors responsible for this story: Ben Sills at firstname.lastname@example.org, Patrick Henry, James AmottFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Chris Ballinger came away from a year of crunching numbers at Toyota Motor Corp.’s Silicon Valley skunkworks convinced that his dream of automotive automation was no more fanciful than his bosses’ ambition to make a vehicle that can drive itself.So the former derivatives trader who spent 14 months as finance chief at Toyota’s innovation hub launched a non-profit that aims to turn cars into rolling wallets able to autonomously make and receive payments in a virtual currency. Drivers would earn small sums for sharing data on everything from traffic congestion to weather and be debited for infrastructure use and contribution to pollution.‘’Everyone focusing on autonomous vehicles thinks they’ll be able to drink cognac in the back, but machines will do many other things autonomously before they can surmount a problem of driving around somewhere like Bangalore or in particularly bad weather,” said Ballinger, a 62-year-old resident of Los Angeles, where he runs his Mobility Open Blockchain Initiative. “It’s a very hard engineering problem, but setting up machine-to machine payments is comparatively very simple.”Simple is a relative word. The vision is as futuristic as it is ambitious. It depends on a myriad of technological advancements, not to mention regulatory change and cooperation among traditional rivals. While cars already have ever more computing power, changing long-held views on infrastructure funding, vehicle ownership and even the nature of money could prove insurmountable. And then there’s the law of unintended consequences.“When tech is applied to cities and transportation by smart people who understand tech but don’t understand cities, the outcome can actually be bad for cities and create new or bigger problems,’’ says Brent Toderian, former chief city planner in Vancouver. “There’s a danger to boosterism with these kinds of ideas, and a need to be cautious and critical in a way that tech folks often aren’t.’’ As an example, he said new technology could lead to more driving, reducing any positive environmental impact such advances were supposed to deliver.Whatever the challenges, the mobility sector is -- in industry jargon -- a burning platform, meaning urgent change is required to head off obsolescence. While artificial intelligence and blockchain could make Ballinger’s vision possible, the dominance of a small club of Silicon Valley heavyweights means automakers risk being left behind in the digital age, said Jamie Burke, an adviser to MOBI and founder of Outlier Ventures, which invests in companies developing such technologies.Facebook Inc.’s Libra stablecoin, a global currency that social networking behemoth is developing, is like gasoline on the burning platform he said.“We don’t have the luxury of tinkering around anymore, we need to get our acts together to accelerate action toward what is moving already,” said Ballinger. “Everybody is asking should every market have its own token and do we need to have one?”Ballinger co-founded MOBI last year with the likes of BMW AG and Ford Motor Co among its founding members. The consortium, which now has about 90 members from International Business Machines Corp. to Honda Motor Co., is exploring how blockchain and related technologies can contribute to a safer and more efficient transport system, while also reducing congestion and pollution.The first blockchain — a public ledger -- was created to track Bitcoin transactions, and the technology has since been adopted far beyond the realm of cryptocurrencies for everything from enabling international payments to verifying products in a supply chain. The digital currency universe has also expanded rapidly in the past decade, with low-volatility digital tokens known as stablecoins among the fastest growing sub sectors.For the vision to materialize, city infrastructure will have to be equipped to communicate with vehicles. Smart cities, urban metropolises pulsating with sensors and powered by artificial intelligence, are on the drawing board. Alphabet Inc.’s urban innovation unit Sidewalk Labs LLC is working on creating a “city of the future” on Toronto’s waterfront.The building blocks exist, making the bigger challenge getting the various technologies and devices to communicate, according to Maria Minaricova, head of business development at Fetch.ai, a Cambridge, U.K.-based company focused on AI, blockchain and internet of things technologies that is also a member of the MOBI consortium.“There are already so many sensors -- cars have sensors, so do traffic lights and cameras, and so on -- but they’re currently disconnected and what’s also missing is interoperability,” said Minaricova. “Historically if you produced somethingm, you would keep it on your platform and it could only communicate with your devices, but the new generation will need to open this up so all devices can speak to each other.”MOBI is now working with BMW, Ford, Honda, General Motors Co. and Renault SA to develop a trusted digital identity for vehicles as a first step toward enabling a mobility payments network. Last month MOBI hosted a gathering of industry executives in Los Angeles to discuss how such a payments system might work.MOBI could develop an industry stablecoin, as low volatility virtual currencies are known, or use an existing coin to make and receive micropayments on a blockchain network, says Ballinger. The project would not only change how vehicles and cities interact but could also provide a real world use case for digital currencies beyond speculation.“Everyone is excited by the promise of technology and waiting for the first killer app, for what will be to digital currencies what email is to the internet,” he says. “That is, where does it get used in a way that consumers find it adds value compared to existing payment systems, and we think mobility and machine-to-machine payments are likely to be one such area because we have big issues with funding public infrastructure and charging for congestion and carbon.”To contact the author of this story: Alastair Marsh in London at email@example.comTo contact the editor responsible for this story: James Hertling at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Democratic Representative Alexandria Ocasio-Cortez and Presidential candidate Bernie Sanders are taking a victory lap after Amazon.com Inc. and other technology giants leased millions of square feet of office space in New York City -- without the billions of dollars in government support that Amazon tried to negotiate earlier this year.Amazon signed a lease on Friday for 335,000 square feet in the Hudson Yards neighborhood, enough space for more than 1,500 workers. The largest U.S. e-commerce company said it wasn’t getting tax benefits or other incentives.A few weeks earlier, Facebook Inc. leased more than 1.5 million square feet in the city, and the social-networking giant is looking for 700,000 more square feet, according to the Wall Street Journal. Google is also in the midst of a major expansion in the city, adding thousands of employees in coming years.The moves suggest that New York’s deep pool of talented workers is still attracting tech companies even after Amazon abandoned a much larger expansion in the area following fierce public criticism of almost $3 billion in tax breaks and subsidies promised to the company.https://t.co/AC64pG0nZI pic.twitter.com/xzCepkX4AV— Alexandria Ocasio-Cortez (@AOC) December 6, 2019 Ocasio-Cortez, who represents parts of the Bronx and Queens, was a vocal critic of Amazon’s doomed HQ2 deal, and she tweeted that the company’s recent lease proved she was right.Sanders, who has slammed Amazon for warehouse working conditions and the company’s low federal tax rate, weighed in this weekend, too.Their comments were pilloried by some on Twitter, who said that 1,500 Amazon jobs are a fraction of the company’s earlier plan to bring about 25,000 workers to the area.Ocasio-Cortez responded by arguing that Amazon’s larger jobs pledge was longer-term and would have cost the city more.To contact the reporter on this story: Alistair Barr in San Francisco at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Virginia Van Natta, James LuddenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Russia has been linked to the leak of U.K. government documents behind Labour Party leader Jeremy Corbyn’s election-campaign claim that the Conservative Party would put the National Health Service on the table in trade talks with the U.S.Social news and aggregation firm Reddit Inc. on Friday banned 61 accounts under its policies against “vote manipulation” ahead of Britain’s general election on Dec. 12. The accounts, which were used to draw attention to the trade documents, were “part of a campaign that has been reported as originating from Russia,” according to Reddit.The documents have become a staple of Labour’s election campaign. Corbyn has repeatedly waved them at campaign events to publicly accuse Prime Minister Boris Johnson and the Conservatives of putting the NHS at risk in talks on a future free-trade deal with the U.S. Johnson has consistently denied he would open the healthcare system to U.S. interests, calling the charge “pure Bermuda-triangle stuff” during the most recent debate.Public InterestWhen asked about the Russia link on Saturday, Corbyn dismissed it as “nonsense,” and pointed out that Johnson has never denied the documents’ authenticity.“The issues are that those documents show exactly what the British government was doing in discussions with Donald Trump’s administration in the U.S., and also why the prime minister has refused to release the report on Russian interference in British politics, which he’s been sitting on for a very long time,” Corbyn said on Sky News.Corbyn was referring to Johnson’s refusal to release a report by a U.K. intelligence watchdog that raises concern about Russian interference in the campaign. The Labour Party released the trade documents because they are “clearly in the public interest,” a spokesman said on Saturday. Corbyn has refused to identify the source of the leak.Johnson has managed to brush back Corbyn’s attacks over the NHS and kept the Conservative campaign focused on his pledge to complete the U.K.’s exit from the European Union, a strategy that appears to be working. With less than a week to the vote, the last five major polls gave the Conservatives an average lead of around 10 percentage points. Johnson is heading for a clear victory, senior officials in both main parties told Bloomberg.‘Secondary Infektion’Reddit said its investigation occurred after Facebook Inc. discovered a Russian campaign on its network earlier this year dubbed “Secondary Infektion.” More recent accounts on Reddit bear similarities to that campaign, “causing us to believe that this was indeed tied to the original group,” the firm said.“Suspect accounts on Reddit were recently reported to us, along with indicators from law enforcement, and we were able to confirm that they did indeed show a pattern of coordination,” Reddit said. The banned accounts will be preserved for a time so that they can be scrutinized by researchers and the public.Kremlin spokesman Dmitry Peskov has said there are no grounds for the accusations against Russia.The Reddit accounts were removed after social media research firm Graphika Inc. published a blog on Dec. 2 saying that hundred of pages of leaked documents on trade between the U.S. and U.K. were amplified online in a manner “closely” resembling tactics used in the Secondary Infektion campaign.The U.K. operation appeared to start in October when “a German-language persona” that called itself Max Ostermann posted information about the leaked trade documents to three websites including German subreddit r/de, as well as an Austrian local-news blog and a Berlin-based platform, according to Graphika.The documents were then amplified using tactics previously seen in Secondary Infektion. These tactics included the use of “burner accounts” -- which post once before apparently being abandoned -- as well use of a “conspiracy site” called beforeitsnews.com, the Graphika report said.“Even before the Reddit post, the big question was how the unredacted U.K. documents ended up online,” said Ben Nimmo, director of investigations at Graphika. “That question just got bigger.”\--With assistance from Tim Ross.To contact the reporters on this story: Nathan Crooks in Miami at email@example.com;Alyza Sebenius in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Andrew Davis at email@example.com, Patrick HenryFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Facebook is selling Oculus Medium -- a 3D virtual reality sculpting tool for creatives -- to Adobe. The team was an expensive effort for Oculus and its sale signifies a broader rethinking within Facebook about which virtual reality projects they tackle in-house. It's clear that Oculus pumped an awful lot of money into Medium over the years, and the sale probably isn't great for the Oculus Medium team, if only because there is now a proper price tag attached to the effort that will be looming for the fairly niche software.
(Bloomberg Opinion) -- Three months before Slovakia’s national election, Robert Fico, the nation’s former three-term prime minister and current leader of the ruling party, has been charged with hate speech, an offense that can potentially land him in prison for five years. Though what he said is certainly reprehensible, the case shows why censoring political speech, as many European countries routinely do, isn’t a great idea.The story began in October 2016, when Milan Mazurek, a nationalist member of the Slovak parliament, said in a radio interview that the government shouldn’t be funding housing for the country’s Roma minority — “people who have never done anything for our nation or our state, but on the contrary, chose to live in an asocial way and suck on our social system.” Both Mazurek and the radio station later were fined, and the legislator lost his parliamentary mandate. Slovakia’s Supreme Court made the final decision in the case in September 2019.Soon afterward, Fico posted a video on Facebook, in which he said: “Milan Mazurek only said what nearly the whole nation thinks. If you punish someone for telling the truth, you make him a national hero.” That’s what landed him in trouble with the National Criminal Agency, which charged him on Thursday with disparaging nation, race and belief and with inciting ethnic hatred.The Roma, often described as Europe’s largest ethnic minority, are highly visible in Slovakia. They make up just 2% of the country’s population, but they largely live in segregated, often miserable settlements on the edge of villages or towns. An attempt to map them in 2016 found 804 such settlements. Few serious attempts at desegregation have been made: They are politically unpopular. Slovakia has one of the most anti-Roma populations in Europe.So in a way, what Fico said about Mazurek’s conviction making nationalist ideas even more popular makes sense — even if describing the ex-legislator’s word as “the truth” was unworthy of a mainstream European politician who has headed his country’s government for a total of 10 years. The Roma, after all, were an ethnic group the Nazis persecuted with an ardor matched only by that of the Holocaust.Yet Fico, as is his wont, couldn’t resist making a populist statement as his party, Smer, battles to retain its lead ahead of the election, set for Feb. 29 of next year. Though Fico is probably the most senior and high-profile political figure in Europe to be charged with inciting ethnic hate, European countries don’t shy away from using their hate speech laws against politicians. Far-right German politician Lutz Bachmann, founder of the anti-Islamic Pegida movement that staged huge demonstrations in eastern Germany, was fined 9,600 euros in 2016 for calling refugees from the Middle East “cattle,” “filth” and “scum.”French far-right leader Marine Le Pen spent years fighting criminal charges after her 2010 comment comparing Muslims praying in the streets to Nazi occupiers; she was acquitted in 2015, but now another trial is pending for her for posting gruesome images of Islamic State victims on Twitter in 2015, after a series of terror attacks in Paris. Lesser activists are regularly charged and sometimes sentenced.But Fico’s case, coming as it does in the heat of an election campaign, shows the potential for hate speech laws to be abused for political ends — something Fico himself, unsurprisingly, raised in a Facebook post on Friday. He claimed he was charged for “expressing an opinion” and accused the opposition of using the charges to attack his party, which stood firmly behind him.Thanks in large part to Smer’s long rule, Slovakia’s democratic institutions are hardly a shining example to the rest of Europe. Last year, Fico was forced to resign as prime minister after the murder of an investigative journalist and his fiance sparked mass protests. A wealthy businessman has been charged with ordering the killings.Corruption, even state capture, has emerged as a major problem, resulting in the election of anti-graft activist Zuzana Caputova to the country’s relatively weak presidency this year. The party behind the Caputova phenomenon, Progressive Slovakia, is the second most popular in the country behind Smer.But if it’s time for a change of ruling party, it shouldn’t come thanks to the prosecution of Smer’s leader for something he said. The charges could even backfire, given the Slovak public’s distrust of the Roma and the growing popularity of nationalist parties.It would be far better for the downtrodden minority and the country as a whole if the opposition could convincingly argue the case for a stronger and smarter integration effort and present a contrast to Fico’s rhetoric. Constructive moderate speech can win lots of votes, as Caputova proved earlier this year. Given Europe’s history with extreme nationalism, banning politicians from saying whatever they want on matters of race and ethnicity may look like an effective insurance policy against the emergence of another Hitler. It could be argued, though, that letting them speak their minds and play openly to nationalist sentiment would also strengthen resistance to populism. In a way, that’s what has happened in the U.S. since the election of Donald Trump as president. Speech, even disgusting speech, shouldn’t be a crime unless it calls directly for violence. Fico should be allowed to fight on free of harassment. If he loses, it’ll be a sign that European values are alive in Slovakia. If he wins, it’ll be as clear a sign of more nationalist trouble in Eastern Europe — and a signal for moderate forces to organize more effectively.To contact the author of this story: Leonid Bershidsky at firstname.lastname@example.orgTo contact the editor responsible for this story: Tobin Harshaw at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Less than a year after Amazon.com Inc. walked away from a planned headquarters in New York, the e-commerce giant has announced a significant expansion in midtown Manhattan.The company signed a lease for 335,000 square feet in the Hudson Yards neighborhood on the west side. The new office will accommodate more than 1,500 workers and is slated to open in 2021, according to an e-mailed statement.“As we shared earlier this year, we plan to continue to hire and grow organically across our 18 Tech Hubs, including New York City,” the Seattle-based company said.Amazon abandoned plans in February to build an additional headquarters in New York’s Long Island City neighborhood following fierce public criticism of tax breaks promised to the company, and concerns about the impact on housing costs and transportation. The move sent shock waves through New York’s real estate community, which worried that the city was becoming inhospitable to business.But recent months have shown that companies are still attracted to New York and its deep pool of talented workers. Facebook Inc. announced that it was leasing more than 1.5 million square feet at Hudson Yards last month. And Google is also in the midst of a major expansion in the city.Amazon said it is not receiving tax benefits or other incentives for its new office, which will be located in SL Green Realty Corp.’s building on 10th Avenue between 33rd and 34th Streets. The outpost will be roughly the same size as the company’s other corporate offices in New York, where it currently has more than 3,500 employees in its tech hub.Dow Jones reported the lease earlier on Friday.To contact the reporter on this story: Noah Buhayar in Seattle at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Giammona at email@example.com, Linus Chua, Stanley JamesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The past decade saw a ton of innovation from incumbent companies — like Amazon, Google, and Facebook. But new companies emerged as well and made their mark.
(Bloomberg Opinion) -- What to make of the alarming data on assaults, murders and other unsafe incidents reported by Uber Technologies Inc. on Thursday?More than 3,000 sexual assault allegations were made in 2018 by Uber drivers and passengers in the U.S., the company said in a first-of-its-kind safety report. We can't know from the data if Uber is statistically safer than other forms of transportation, or safer than being a human — particularly a female human — in the United States in 2019. Taxis, public-transit agencies, professional-car services and other transportation providers don’t make comparable national reports of crime as Uber has done.The reported incidents are a fraction of the more than 1 billion rides Uber transacts in the U.S. each year. There is, though, one sure thing we can say about Uber, Lyft and related services that make them different than other forms of transportation: They sold us on the power of trust, and any erosion in that trust makes the companies vulnerable.When services such as Uber and Airbnb were getting off the ground earlier this decade, people were understandably apprehensive about taking a ride with strangers, or staying in the home of a random person. Our parents literally cautioned us against this our whole lives, and it seemed incredibly stupid to defy a lifetime of warnings.Slowly, though, these services wore down many people's natural reluctance to trust strangers in these circumstances. That was partly because Uber, Airbnb and similar companies were too convenient and useful for many people to shun. But also, and importantly, our stranger-danger fears wore down because the companies successfully convinced us to trust that any danger of that type was remote.The idea is that the collective power of millions of riders and drivers rating and reviewing each other would keep us safe. Uber and its peers around the world also touted their ability to screen drivers and passengers, and track rides to protect people from possible harm. There were questions from the beginning about how well Uber and other companies that put regular folks in the role of professional driver were screening people who used its service. But the companies’ ability to convince many people to tamp down their stranger-danger anxiety was a secret to success for Uber, Airbnb and the like.That's why anecdotes — and now data — of horrible crimes on Uber passengers and drivers matter, no matter whether they are statistically large or small. Those old feelings of anxiety recur.The sad fact is that assault is a common crime we don't like to think or talk about, because it makes us feel vulnerable. Every institution in America can do much more to protect vulnerable people. None of that absolves Uber from responsibility to do more.There is compelling reporting indicating that Uber sometimes protects itself from liability at the expense of drivers and riders who are preyed upon. Uber in its early years of aggressive expansion did truly unconscionable things in response to allegations of a passenger raped in India.Now, Uber deserves credit for doing the work to catalog and disclose incidents of abuse in its network, but we can’t be confident how many terrible abuses could have been avoided if Uber did more to prioritize safety. How much of the problem is Uber, and how much is the world? Because companies such as Uber sold us on trust, they get no passes when it comes to ensuring the safety of riders and drivers.The collective power of trust is one of those internet-era truisms that is coming under question now. It turns out those five-star product reviews can be bought and gamed. That person on Facebook who says she’s a civil rights activist may be a Russian propagandist. It turns out that even genius technology companies are fallible, perhaps willfully so, about letting dangerous people slip through the cracks.These risks are all present in the real world, of course, but for a long time we were convinced the power of the internet made trust more solid. Now companies, and the users of their products and services, are reckoning with the limits of trust. To contact the author of this story: Shira Ovide at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
U.S. regulators on Friday said they had found now-defunct British political consulting firm Cambridge Analytica deceived consumers about the collection of Facebook Inc data for voter profiling and targeting. The Federal Trade Commission also found that Cambridge Analytica engaged in deceptive practices relating to its participation in the EU-U.S. Privacy Shield framework - a pact on the cross-border transfer of personal data. The agency order prohibits Cambridge Analytica from misrepresenting the extent to which it protects the privacy and confidentiality of personal information.
(Bloomberg Opinion) -- Social-media companies insist they’re making progress in fighting the manipulation of their platforms. But two researchers, working on an extremely modest budget, have just shown that their defenses are routinely bypassed by an entire manipulation industry, largely based in Russia.In a report for NATO’s Strategic Communications Center of Excellence, Sebastian Bay and Rolf Fredheim described an experiment they ran between May and August. In the first two months, during and just after the European Parliament election campaign, they hired 11 Russian and five European “manipulation service providers,” who they found simply by searching the web. The companies then delivered 3,530 comments, 25,750 likes, 20,000 views and 5,100 followers on Facebook, Twitter, Instagram and YouTube — all fake.Given how serious the social-media platforms claim to be about purging inauthentic activity, the experiment’s success rate was stunning. Four weeks after they were posted, a vast majority of the fake engagements were still live; even reporting them to the platforms didn’t get most removed.The study reveals a major weakness in the way the social-media giants report their anti-fraud efforts. Facebook has a lot to say about how much content it removes, for instance, but that’s like the mayor of a town reporting that 50% of its roads are now pothole-free: You never know which 50%. The important metric is how much manipulative content gets through. Bay and Fredheim found that, once professionals get involved, most of their work sticks, to the extent that they often deliver more engagements than promised for the money. Defenses only work on the most basic level. The pros are always a step ahead.NATO, of course, is mostly interested in political manipulation, and the researchers found that some of the same accounts that helped carry out their study “had been used to buy engagement on 721 political pages and 52 government pages, including the official accounts of two presidents, the official page of a European political party, and a number of junior and local politicians in Europe and the United States.”An important question is whether such efforts actually work. One recent paper tried to determine what effect the Russian troll farm known as the Internet Research Agency has had on U.S. political attitudes. The IRA, whose employees and owner were indicted in special counsel Robert Mueller’s investigation into meddling in the 2016 election, used some of the same techniques as the NATO Stratcom researchers. But, the paper said, their fake accounts were effectively preaching to the converted. Even for users who directly interacted with the IRA accounts, the researchers found “no substantial effects” on their political opinions, engagement with politics or attitudes toward members of the opposing party.This doesn’t mean social-network manipulation is ineffective for political purposes; much more research would be needed to draw any sweeping conclusions. What’s clear now, though, is that the manipulation industry isn’t primarily geared toward political uses. Bay and Fredheim found that “more than 90% of purchased engagements on social media are used for commercial purposes.” Even though it’s Russian-based, this industry isn’t about evil Kremlin masterminds trying to turn technology against American democracy. Rather, it’s about talented Russian engineers, stuck in the wrong country for launching grand commercial ventures like Facebook or YouTube, trying to make money by milking the existing platforms.What that usually amounts to is helping online “influencers” cheat advertisers. The abysmally low removal rates for fake video views in the Stratcom experiment show the platforms aren’t fighting such abuses hard enough. They don’t have to: They’re still essentially black boxes from an advertising client’s point of view. As a result, perhaps billions of dollars (estimates vary wildly) are lost to such fraud each year.Platforms have spent enough time trying, and failing, to prove that self-regulation can work for them. Governments should act to protect not so much voters as advertisers from the manipulation industry, penalizing social-media companies for their inability to prevent fraud and demanding more transparency. Now, as Bay and Fredheim wrote, “data is becoming scarcer and our opportunities to research this field is constantly shrinking. This effectively transfers the ability to understand what is happening on the platforms to social media companies. Independent and well-resourced oversight is needed.”Policy makers need to realize that the platform-manipulation industry doesn’t thrive because it’s a Kremlin weapon. Political weaponization is only a side effect of a parasitic industry built on the flaws of the social-media business model. It’s the model that needs to be regulated.To contact the author of this story: Leonid Bershidsky at firstname.lastname@example.orgTo contact the editor responsible for this story: Timothy Lavin at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Peak globalization is one of 10 investing themes Bank of America-Merrill Lynch has highlighted for the next decade. Shifting demographics and automation are two other stories with investment implications.
(Bloomberg Opinion) -- For many anti-Brexit centrists in the U.K., it makes no sense that Jo Swinson’s Liberal Democrats are doing so poorly in the polls. If you’re unhappy about Britain quitting the European Union under Boris Johnson and you’re unexcited by the Labour Party’s quasi-Marxist economic experiments, then who else do you give your vote to on Dec. 12?The center has been abandoned by Johnson’s Conservatives and Jeremy Corbyn’s Labour; unfortunately, the Lib Dems have failed to fill it, not least because of their uncharacteristically radical (and undemocratic) promise to scrap Brexit altogether — without another referendum.For a time this year, events seemed encouraging for Swinson. The Lib Dems came second to Nigel Farage’s Brexit Party in the European Parliamentary election, winning 20% of the vote. They then nabbed 700 new council seats in local elections and benefited from eight defections of members of Parliament from other parties. Their new leader put out leaflets saying “Jo Swinson, Britain’s Next Prime Minister.”Indeed, the whole reason the U.K. is having an early election is because Swinson decided, along with the Scottish National Party, to back Johnson’s call for one. Without that decision, he would have remained in charge of a lame duck minority government and his Brexit deal would have come in for some real scrutiny. Her decision was always a gamble, and one that looks like failing.“Why do you risk going down in the history books as the party leader that paved the way for Boris Johnson to win an overall majority, deliver his Brexit and govern for the next five years?” the BBC’s Andrew Neil asked Swinson in October. “You’ve given a Tory prime minister the Christmas present he craved.” Swinson batted away the suggestion that she had zero chance of becoming prime minister, citing Donald Trump’s victory and the Brexit vote. “Nothing is certain,” she insisted. But when she met Neil again for an interview this week, the change of tone was clear. Swinson is no longer running for Downing Street.Her party now polls 13% on average. A YouGov survey, using methodology that was accurate in the last election (known as MRP) gives it only one extra seat in Parliament. U.K. Polls are notoriously unreliable, but the party too seems to have scaled back its ambitions. According to Who Targets Me, which tracks campaign ads, the Lib Dems have launched 47 new Facebook ads targeting a very narrow list of seats. In Swinson’s Scottish seat in East Dunbartonshire, her party is running defensive ads, asking voters to “stop the SNP” rather than make its leader prime minister.In their favor, the Lib Dems have well-established local operations, so their ground game in the constituencies they’re targeting is fairly strong. They come a close second to Labour and well ahead of the Tories in online ad spending. It’s unclear, though, how much help either factor will bring.An analysis by the Telegraph newspaper identifies 13 Lib Dem target seats where a swing in the vote of 7.5% or less would give Swinson’s party a win; nine are in Conservative hands and most backed remain in the referendum. But the 21 seats already held by the Lib Dems aren’t even considered safe. This doesn’t herald the kind of election night Swinson had in mind when she agreed to a vote.Three problems contribute to her troubles; two of her own making. The first was Swinson’s decision taken to adopt a policy of revoking Brexit if she won an election outright. While the plan was backed at the party’s conference, there was no great enthusiasm for it.Revoke was a risky choice for a party meant to occupy the pragmatic center; far from uniting remainers, it struck many voters as undemocratic. How could a party put in power by less than half the popular vote overturn a referendum with a 52% majority? Swinson has struggled to answer that. Second, if the big strategic decision has gone wrong, so have some tactical ones. Swinson has been forced to defend some creative bar charts that showed her party practically drawing even with the Conservatives. It turns out the polling question had asked a small sample of local voters in North East Somerset which party they’d vote for if only the Tories and the Lib Dems were in contention. A similar thing occurred in Hastings and Rye. British actor Hugh Grant had to correct the record when the party celebrated his support for the Lib Dems; he was merely campaigning for tactical voting to keep out Johnson and his Brexit deal.For a party trying to prove it’s more trustworthy than the Tories and more competent than Labour, none of this inspires confidence. It hasn’t helped that the campaign was centered around Swinson herself, a virtual unknown when she became leader. The declining ratings for her and the party will encourage voters who want their ballot to count to return to one of the main parties. I wrote in July that Swinson’s success would depend largely on Johnson faltering, which hasn’t yet happened with less than a week of campaigning to go. That’s because of the third problem the Liberal Democrats face: the U.K. electoral system, which the party has long wanted to change. It’s a winner-takes-all approach, where small parties are elbowed out of the way by the big two. That pattern seems about to be repeated.To contact the author of this story: Therese Raphael at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The social media company accused ILikeAd Media International Co software developer Chen Xiao Cong and marketer Huang Tao of using improper "celeb bait" and "cloaking" practices since at least 2016. Facebook said this enabled the defendants to hijack users' ad accounts, known as "account take over fraud," violating its terms of service and advertising policies. Facebook said this kind of lawsuit is rare, and that it has since April notified hundreds of thousands of users that their accounts may have been compromised.