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Facebook and Twitter CEOs to testify before Congress in November on how they handled the election

By Taylor Hatmaker

Shortly after voting to move forward with a pair of subpoenas, the Senate Judiciary Committee has reached an agreement that will see the CEOs of two major social platforms testify voluntarily in November. The hearing will be the second major congressional appearance by tech CEOs arranged this month.

Twitter’s Jack Dorsey and Facebook’s Mark Zuckerberg will answer questions at the hearing, set for November 17 — two weeks after election day. The Republican-led committee is chaired by South Carolina Senator Lindsey Graham, who set the agenda to include the “platforms’ censorship and suppression of New York Post articles.”

According to a new press release from the committee, lawmakers also plan to use the proceedings as a high-profile port-mortem on how Twitter and Facebook fared on and after election day — an issue that lawmakers on both sides will undoubtedly be happy to dig into.

Republicans are eager to press the tech CEOs on how their respective platforms handled a dubious story from the New York Post purporting to report on hacked materials from presidential candidate Joe Biden’s son, Hunter Biden. They view the incident as evidence of their ongoing claims of anti-conservative political bias in platform policy decisions.

While Republicans on the Senate committee led the decision to pressure Zuckerberg and Dorsey into testifying, the committee’s Democrats, who sat out the vote on the subpoenas, will likely bring to the table their own questions about content moderation, as well.

Senate subpoenas could force Zuckerberg and Dorsey to testify on New York Post controversy

By Taylor Hatmaker

The Senate Judiciary Committee voted in favor of issuing subpoenas for Facebook’s Mark Zuckerberg and Twitter’s Jack Dorsey Thursday, meaning that there might be two big tech CEO hearings on the horizon.

Republicans in the committee declared their interest in a hearing on “the platforms’ censorship of New York Post articles” after social networks limited the reach of a dubious story purporting to contain hacked materials implicating Hunter Biden, Joe Biden’s son, in impropriety involving a Ukrainian energy firm. Fox News reportedly passed on the story due to doubts about its credibility.

Tech’s decision to take action against the New York Post story was bound to ignite Republicans in Congress, who have long claimed, with scant evidence, that social platforms deliberately censor conservative voices due to political bias. The Senate Judiciary Committee is chaired by Lindsey Graham (R-SC), a close Trump ally who is now in a much closer than expected race with Democratic challenger Jaime Harrison.

Earlier in October, the Senate Commerce Committee successfully leveraged subpoena power to secure Dorsey, Zuckerberg and Alphabet’s Sundar Pichai for testimony for their own hearing focused on Section 230, the critical law that shields online platforms from liability for user created content.

The hearing isn’t scheduled yet, nor have the companies publicly agreed to attend. But lawmakers have now established a precedent for successfully dragging tech’s reluctant leaders under oath, making it more difficult for some of the world’s wealthiest and most powerful men to avoid Congress from here on out.

Daily Crunch: Facebook Dating comes to Europe

By Anthony Ha

Facebook’s dating feature expands after a regulatory delay, we review the new Amazon Echo and President Donald Trump has an on-the-nose Twitter password. This is your Daily Crunch for October 22, 2020.

The big story: Facebook Dating comes to Europe

Back in February, Facebook had to call off the European launch date of its dating service after failing to provide the Irish Data Protection Commission with enough advanced notice of the launch. Now it seems the regulator has given Facebook the go-ahead.

Facebook Dating (which launched in the U.S. last year) allows users to create a separate dating profile, identify secret chats and go on video dates.

As for any privacy and regulatory concerns, the commission told us, “Facebook has provided detailed clarifications on the processing of personal data in the context of the Dating feature … We will continue to monitor the product as it launches across the EU this week.”

The tech giants

Amazon Echo review: Well-rounded sound — This year’s redesign centers on another audio upgrade.

Facebook adds hosting, shopping features and pricing tiers to WhatsApp Business — Facebook is launching a way to shop for and pay for goods and services in WhatsApp chats, and it said it will finally start to charge companies using WhatsApp for Business.

Spotify takes on radio with its own daily morning show — The new program will combine news, pop culture, entertainment and music personalized to the listener.

Startups, funding and venture capital

Chinese live tutoring app Yuanfudao is now worth $15.5 billion — The homework tutoring app founded in 2012 has surpassed Byju’s as the most valuable edtech company in the world.

E-bike subscription service Dance closes $17.7M Series A, led by HV Holtzbrinck Ventures — The founders of SoundCloud launched their e-bike service three months ago.

Freelancer banking startup Lili raises $15M — It’s only been a few months since Lili announced its $10 million seed round, and it’s already raised more funding.

Advice and analysis from Extra Crunch

How unicorns helped venture capital get later, and bigger — Q3 2020 was a standout period for how high late-stage money stacked up compared to cash available to younger startups.

Ten Zurich-area investors on Switzerland’s 2020 startup outlook — According to official estimates, the number of new Swiss startups has skyrocketed by 700% since 1996.

Four quick bites and obituaries on Quibi (RIP 2020-2020) — What we can learn from Quibi’s amazing, instantaneous, billions-of-dollars failure.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

President Trump’s Twitter accessed by security expert who guessed password “maga2020!” — After logging into President Trump’s account, the researcher said he alerted Homeland Security and the password was changed.

For the theremin’s 100th anniversary, Moog unveils the gorgeous Claravox Centennial — With a walnut cabinet, brass antennas and a plethora of wonderful knobs and dials, the Claravox looks like it emerged from a prewar recording studio.

Announcing the Agenda for TC Sessions: Space 2020 — Our first-ever dedicated space event is happening on December 16 and 17.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

3 reforms social media platforms should make in light of ‘The Social Dilemma’

By Walter Thompson
Jason Morgese Contributor
Jason Morgese is the founder and CEO of Leavemark, the first ad-free, data storage and social media hybrid.

“The Social Dilemma” is opening eyes and changing digital lives for Netflix bingers across the globe. The filmmakers explore social media and its effects on society, raising some crucial points about impacts on mental health, politics and the myriad ways firms leverage user data. It interweaves interviews from industry executives and developers who discuss how social sites can manipulate human psychology to drive deeper engagement and time spent within the platforms.

Despite the glaring issues present with social media platforms, people still crave digital attention, especially during a pandemic, where in-person connections are strained if not impossible.

So, how can the industry change for the better? Here are three ways social media should adapt to create happier and healthier interpersonal connections and news consumption.

Stop censoring

On most platforms, like Facebook and Instagram, the company determines some of the information presented to users. This opens the platform to manipulation by bad actors and raises questions about who exactly is dictating what information is seen and what is not. What are the motivations behind those decisions? And some of the platforms dispute their role in this process, with Mark Zuckerberg saying in 2019, “I just believe strongly that Facebook shouldn’t be the arbiter of truth of everything that people say online.”

Censorship can be absolved with a restructured type of social platform. For example, consider a platform that does not rely on advertiser dollars. If a social platform is free for basic users but monetized by a subscription model, there is no need to use an information-gathering algorithm to determine which news and content are served to users.

This type of platform is not a ripe target for manipulation because users only see information from people they know and trust, not advertisers or random third parties. Manipulation on major social channels happens frequently when people create zombie accounts to flood content with fake “likes” and “views” to affect the viewed content. It’s commonly exposed as a tactic for election meddling, where agents use social media to promote false statements. This type of action is a fundamental flaw of social algorithms that use AI to make decisions about when and what to censor as well as what it should promote.

Don’t treat users like products

The issues raised by “The Social Dilemma” should reinforce the need for social platforms to self-regulate their content and user dynamics and operate ethically. They should review their most manipulative technologies that cause isolation, depression and other issues and instead find ways to promote community, progressive action and other positive attributes.

A major change required to bring this about is to eliminate or reduce in-platform advertising. An ad-free model means the platform does not need to aggressively push unsolicited content from unsolicited sources. When ads are the main driver for a platform, then the social company has a vested interest in using every psychological and algorithm-based trick to keep the user on the platform. It’s a numbers game that puts profit over users.

More people multiplied by more time on the site equals ad exposure and ad engagement and that means revenue. An ad-free model frees a platform from trying to elicit emotional responses based on a user’s past actions, all to keep them trapped on the site, perhaps to an addictive degree.

Encourage connections without clickbait

A common form of clickbait is found on the typical social search page. A user clicks on an image or preview video that suggests a certain type of content, but upon clicking they are brought to unrelated content. It’s a technique that can be used to spread misinformation, which is especially dangerous for viewers who rely on social platforms for their news consumption, instead of traditional outlets. According to the Pew Research Center, 55% of adults get their news from social media “often” or “sometimes.” This causes a significant problem when clickbait articles make it easier to offer distorted “fake news” stories.

Unfortunately, when users engage with clickbait content, they are effectively “voting” for that information. That seemingly innocuous action creates a financial reason for others to create and disseminate further clickbait. Social media platforms should aggressively ban or limit clickbait. Management at Facebook and other firms often counter with a “free speech” argument when it comes to stopping clickbait. However, they should consider the intent is not to act as censors that are stopping controversial topics but protecting users from false content. It’s about cultivating trust and information sharing, which is much easier to accomplish when post content is backed by facts.

“The Social Dilemma” is rightfully an important film that encourages a vital dialogue about the role social media and social platforms play in everyday life. The industry needs to change to create more engaged and genuine spaces for people to connect without preying on human psychology.

A tall order, but one that should benefit both users and platforms in the long term. Social media still creates important digital connections and functions as a catalyst for positive change and discussion. It’s time for platforms to take note and take responsibility for these needed changes, and opportunities will arise for smaller, emerging platforms taking a different, less-manipulative approach.

Facebook’s controversial Oversight Board starts reviewing content moderation cases

By Taylor Hatmaker

Facebook’s external body of decision makers will start reviewing cases about what stays on the platform and what goes beginning today.

The new system will elevate some of the platform’s content moderation decisions to a new group called the Facebook Oversight Board, which will make decisions and influence precedents about what kind of content should and shouldn’t be allowed.

But as we’ve reported previously, the board’s decisions won’t just magically enact changes on the platform. Instead of setting policy independently, each recommended platform policy change from the oversight board will get kicked back to Facebook, which will “review that guidance” and decide what changes, if any, to make.

The oversight board’s specific case decisions will remain, but that doesn’t mean they’ll really be generalized out to the social network at large. Facebook says it is “committed to enforcing the Board’s decisions on individual pieces of content, and to carefully considering and transparently responding to any policy recommendations.”

The groups’ focus on content taken down rather than content already allowed on the social network will also skew its purview. While a vocal subset of its conservative critics in Congress might disagree, Facebook’s real problems are about what stays online — not what gets taken down.

Whether it’s violent militias connecting and organizing, political figures spreading misleading lies about voting or misinformation from military personnel that fuels an ethnic cleansing, content that spreads on Facebook has the power to reshape reality in extremely dangerous ways.

Noting the criticism, Facebook claims that decisions about content still up on Facebook are “very much in scope from Day 1” because the company can directly refer those cases to the Oversight Board. But with Facebook itself deciding which cases to elevate, that’s another major strike against the board’s independence from the outset.

Facebook says that the board will focus on reviewing content removals initially because of the way its existing systems are set up, but it aims “to bring all types of content outlined in the bylaws into scope as quickly as possible.”

According to Facebook, anyone who has appealed “eligible” Facebook and Instagram content moderation decisions and has already gone through the normal appeal process will get a special ID that they can take to the Oversight Board website to submit their case.

Facebook says the board will decide which cases to consider, pulling from a combination of user-appealed cases and cases that Facebook will send its way. The full slate of board members, announced in May, grew out of four co-chairs that Facebook itself named to the board. The international group of 20 includes former journalists, U.S. appeals court judges, digital rights activists, the ex-prime minister of Denmark and one member from the Cato Institute, the libertarian think tank.

“We expect them to make some decisions that we, at Facebook, will not always agree with – but that’s the point: they are truly autonomous in their exercise of independent judgment,” the company wrote in May.

Critics disagree. Facebook skeptics from every corner have seized on the oversight effort, calling it a charade and pointing out that its decision aren’t really binding.

Facebook was not happy when a group of prominent critics calling itself the “Real Facebook Oversight Board” launched late last month. And earlier this year, a tech watchdog group called for the board’s five U.S.-based members to demand they be given more real power or resign.

Facebook also faced a backlash when it said the Oversight Board, which has been in the works for years, wouldn’t be up and running until “late fall.” But with just weeks to go before election day, Facebook has suddenly scrambled to get new policies and protections in place on issues that it’s dragged its feet on for years — the Oversight Board included, apparently.

Woven adds to its calendar app’s $20/mo premium plan

By Lucas Matney

Productivity software has had a huge couple of years, yet for all of the great note-taking apps that have launched, consumers haven’t gotten a lot of quality options for Google Calendar replacements.

This week, Woven, a calendar startup founded by former Facebook CIO Tim Campos is shaking up the premium tier of their scheduling software, hoping that productivity-focused users will pay to further optimize the calendar experience just as they have paid up for subscription email services like Superhuman and note-taking apps like Notion.

There’s been a pretty huge influx of investor dollars into the productivity space which has shown a lot of promise in bottoms-up scaling inside enterprises by first aiming to sell their products to individuals. Woven has raised about $5 million to date with investments from Battery Ventures, Felicis Ventures and Tiny Capital, among others.

“Time is the most valuable asset that we have,” Campos told TechCrunch. “We think there’s a real opportunity to do much more with the calendar.”

Their new product will help determine just how much demand there is for a pro-tier calendar that aims to make life easier for professionals than Google Calendar or Outlook Calendar cares to. The new product, which is $20 per month ($10 during an early access period if you pay for a year), builds on the company’s free tier product giving users a handful of new features. There’s still quite a bit of functionality in the free tier still, which is sticking around, but the lack of multi-account support is one of the big limitations there. 

Image credit: via Woven.

The core of Woven’s value is likely its Calendly-like scheduling links which allow single users to quickly show when they’re free, or give teams the ability to eliminate back-in-forth entirely when scheduling meetings by scanning everyone’s availability and suggesting times that are uniformly available. In this latest update, the startup has also launched a new feature called Open Invite which allows users to blast out links to join webinars that recipients can quickly register for.

One of Woven’s top features is probably Smart Templates which aims to learn from your habits and strip down the amount of time it takes to organize a meeting. Selecting the template can automatically set you up with a one-time Zoom link, ping participants for their availability with Woven’s scheduling links and take care of mundane details. Now, the titles automatically update depending on participants, location or company information as well. While plenty of productivity happens on the desktop, the startup is trying to push the envelope on mobile as well. They’ve added an iMessage integration to quickly allow people to share their availability and schedule meetings inside chat.

The product updates arrive soon after the announcement of the company’s Zoom “Zapp,” which shoves the app’s functionality inside Zoom and will likely be a bit sell to new users.

 

Facebook adds hosting, shopping features, and pricing tiers to WhatsApp Business

By Ingrid Lunden

Facebook has been making a big play to be a go-to partner for small and medium businesses that use the internet to interface with the wider world, and its messaging platform WhatsApp, with some 50 million businesses and 175 million people messaging them (and more than 2 billion users overall), has been a central part of that pitch.

Now, the company is making three big additions to WhatsApp to fill out that proposition.

It’s launching a way to shop for and pay for goods and services in WhatsApp chats; it’s going head to head with the hosting providers of the world with a new product called Facebook Hosting Services to host businesses’ online assets and activity; and — in line with its expanding product range — Facebook said it will finally start to charge companies using WhatsApp for Business.

Facebook announced the news in a short blog post light on details. We have reached out to the company for more information on pricing, availability of the services, and whether Facebook will provide hosting itself or work with third parties, and we will update this post as we learn more.

Here is what we know for now:

In-chat Shopping. Companies are already using WhatsApp to present product information and initiate discussions for transactions. One of the more recent developments in that area was the addition of QR codes and the ability to share catalog links in chats, added in July. At the same time, Facebook has been expanding the ways that businesses can display what they are selling on Facebook and Instagram, most recently with the launch in August of Facebook Shop, following a similar product roll out on Instagram before that.

Today’s move sounds like a new way for businesses in turn to use WhatsApp both to link through to those Facebook-native catalogs, as well as other products, and then purchase items, while still staying in the chat.

At the same time, Facebook will be making it possible for merchants to add “buy” buttons in other places that will take shoppers to WhatsApp chats to complete the purchase. “We also want to make it easier for businesses to integrate these features into their existing commerce and customer solutions,” it notes. “This will help many small businesses who have been most impacted in this time.”

Although Facebook is not calling this WhatsApp Pay, it seems that this is the next step ahead for the company’s ambitions to bring payments into the chat flow of its messaging app. That has been a long and winding road for the company, which finally launched WhatsApp Payments, using Facebook Pay, in Brazil, in June of this year only to have it shut down by regulators for failing to meet their requirements. (The plan has been to expand it to India, Indonesia and Mexico next.)

Facebook Hosting Services: Thse will be available in the coming months, but no specific date to share right now. “We’re sharing our plans now while we work with our partners to make these services available,” the company said in a statement to TechCrunch.

No! This is not about Facebook taking on AWS. Or… not yet at least? The idea here appears that it is specifically aimed at selling hosting services to the kind of SMBs who already use Facebook and WhatsApp messaging, who either already use hosting services for their online assets, whether that be their online stores or other things, or are finding themselves now needing to for the first time, now that business is all about being “online.”

“Today, all businesses using our API are using either an on-premise solution or leverage a solutions provider, both of which require costly servers to maintain,” Facebook said. “With this change, businesses will be able to choose to use Facebook’s own secure hosting infrastructure for free, which helps remove a costly item for every company that wants to use the WhatsApp Business API, including our business service providers, and will help them all save money.” It added that it will share more info about where data will be hosted closer to launch.

This is a very interesting move, since the SMB hosting market is pretty fragmented with a number of companies, including the likes of GoDaddy, Dream Host, HostGator, BlueHost and many others also offering these services. That fragmentation spells opportunity for a huge company like Facebook with a global profile, a burgeoning amount of connections through to other online services for these SMBs, and a pretty extensive network of data centers around the world that it’s built for itself and can now use to provide services to others — which is, indeed, a pretty strong parallel with how Amazon and AWS have done business.

Facebook already has an “app store” of sorts of partners it works with to provide marketing and related services to businesses using its platform. It looks like it plans to expand this, and will sell the hosting alongside all of that, with the kicker that hosting natively on Facebook will speed up how everything works.

“Providing this option will make it easier for small and medium size businesses to get started, sell products, keep their inventory up to date, and quickly respond to messages they receive – wherever their employees are,” it notes.

Charging tiers: As you would expect, to encourage more adoption, Facebook has not been charging for WhatsApp Business up to now, but it has charged for some WhatsApp business messages — for example when businesses send a boarding pass or e-commerce receipt to a customer over Facebook’s rails. (These prices vary and a list of them is published here.) Now, with more services coming into the mix, and businesses tying their fates more strongly to how well they are performing on Facebook’s platforms, it’s not surprise to see Facebook converting that into a pay to play scenario.

“What we’ve heard over the past couple years is how the conversational nature of business messaging is really valuable to people. So in the future we may look at ways to update how we charge businesses that better reflect how it’s used,” the company told us. Important to note that this will relate to how businesses send messages. “As always, it’s free for people to send a business a message,” Facebook added.

Frustratingly, there seems so far to be no detail on which services will be charged, nor how much, nor when, so this is more of a warning than a new requirement.

“We will charge business customers for some of the services we offer, which will help WhatsApp continue building a business of our own while we provide and expand free end-to-end encrypted text, video and voice calling for more than two billion people,” it notes.

For those who might find that annoying, on the plus side, for those who are concerned about an ever-encroaching data monster, it will, at the least, help WhatsApp and Facebook continue to stick to its age-old commitment to stay away from advertising as a business model.

Doubling-down on SMBs

The new services come at a time when Facebook is doubling down on providing services for businesses, spurred in no small part by the coronavirus pandemic, which has driven physical retailers and others to close their actual doors, shifting their focus to using the internet and mobile services to connect with and sell to customers.

Citing that very trend, last month the company’s COO Sheryl Sandberg announced the Facebook Business Suite, bringing together all of the tools it has been building for companies to better leverage Facebook, Instagram and WhatsApp profiles both to advertise themselves as well as communicate with and sell to customers. And the fact that Sandberg was leading the announcement says something about how Facebook is prioritizing this: it’s striking while the iron is hot with companies using its platform, but it sees/hopes that business services can a key way to diversify its business model while also helping buffer it — since many businesses building Pages may also advertise.

Facebook has also been building more functionality across Facebook and Instagram specifically aimed at helping power users and businesses leverage the two in a more efficient way. Adding in more tools to WhatsApp is the natural progression of all of this.

To be sure, as we pointed out earlier this year, even while there is a lot of very informal use of WhatsApp by businesses all around the world, WhatsApp Business remains a fairly small product, most popular in India and Brazil. Facebook launching more tools for how to use it will potentially drive more business not just in those markets but help the company convert more businesses to using it in other places, too.

Smaller businesses have been on Facebook’s radar for a while now. Even before the pandemic hit, in many cases retailers or restaurants do not have websites of their own, opting for a Facebook Page or Instagram Profile as their URL and primary online interface with the world; and even when they do have standalone sites, they are more likely to update people and spread the word about what they are doing on social media than via their own URLs.

Facebook’s also made a video to help demonstrate how it sees these WhatsApp Business in action, which you can here:

Facebook Dating launches in Europe after 9-month+ delay over privacy concerns

By Natasha Lomas

Facebook’s dating bolt-on to its eponymous social networking service has finally launched in Europe, more than nine months after an earlier planned launched was pulled at the last minute over privacy concerns.

From today, European Facebook users in Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Croatia, Hungary, Ireland, Italy, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia, Iceland, Liechtenstein, Norway, Spain, Switzerland and the UK can opt into Facebook Dating by creating a profile at facebook.com/dating.

Among the dating product’s main features are the ability to share Stories on your profile; a Secret Crush feature that lets you select up to nine of your Facebook friends or Instagram followers who you’d like to date (without them knowing unless they also add you — when you then get a match notification); the ability to see people with similar interests if you add your Facebook Events and Groups to your Dating profile; and a video chat feature called Virtual Dates.

Image credit: Facebook

Of course if you opt in to Facebook Dating you’re going to be plugging even more of your personal data into Facebook’s people profiling machine. And it was concerns about how the dating product would be processing European users’ information that led to a regulatory intervention by the company’s lead data regulator in the EU, the Irish Data Protection Commission (DPC).

Back in February Facebook agreed to postpone the regional launch of Facebook Dating after the DPC’s agents paid a visit to its Dublin office — saying Facebook had not provided it with enough advanced warning of the product launch, nor adequate documentation about how it would work.

More than nine months later the regulator seems satisfied it now understands how Facebook Dating is processing people’s personal data — although it also says it will be monitoring the EU launch.

Additionally, the DPC says Facebook has made some changes to the product in light of concerns it raised (full details below).

Deputy commissioner, Graham Doyle, told TechCrunch: “As you will recall, the DPC became aware of Facebook’s plans to launch Facebook Dating a number of days prior to its planned launch in February of this year. Further to the action taken by the DPC at the time (which included an on-site inspection and a number of queries and concerns being put to Facebook), Facebook has provided detailed clarifications on the processing of personal data in the context of the Dating feature. Facebook has also provided details of changes that they have made to the product to take account of the issues raised by the DPC. We will continue to monitor the product as it launches across the EU this week.”

“Much earlier engagement on such projects is imperative going forward,” he added.

Since the launch of Facebook’s dating product in 20 countries around the world — including the US and a number of markets in Asia and LatAm — the company says more than 1.5 billion matches have been “created”.

In a press release about the European launch, Facebook writes that it has “built Dating with safety, security and privacy at the forefront”, adding: “We worked with experts in these areas to provide easy access to safety tips and build protections into Facebook Dating, including the ability to report and block anyone, as well as stopping people from sending photos, links, payments or videos in messages.”

It also links to an update about Facebook Dating’s privacy which emphasizes the product is an “opt-in experience”. This document includes a section explaining how use of the product impacts Facebook’s data collection and the ads users see across its suite of products.

“Facebook Dating may suggest matches for you based on your activities, preferences and information in Dating and other Facebook Products,” it writes. “We may also use your activity in Dating to personalize your experience, including ads you may see, across Facebook Products. The exception to this is your religious views and the gender(s) you are interested in dating, which will not be used to personalize your experience on other Facebook Products.”

One key privacy-related change flowing from the DPC intervention looks to be that Facebook has committed to excluding the use of Dating users’ religious and sexual orientation information for ad targeting purposes.

Under EU law this type of personal information is classed as ‘special category’ data — and consent to process it requires a higher bar of explicit consent from the user. (And Facebook probably didn’t want to harsh Dating users’ vibe with pop-ups asking them to agree to ads targeting them for being gay or Christian, for example.)

Asked about the product changes, the DPC confirmed a number of changes related to special category data, along with some additional clarifications.

Here’s the full list of “changes and clarifications”:

  • Changes to the user interface around a user’s selection of religious belief. Under the original proposal, the “prefer not to say” option was buried in the choices;
  • Updated sign-up flow within the Dating feature to bring to the user’s attention that Dating is a Facebook product and that it is covered by FB’s terms of service and data policy, as particularised by the Supplemental Facebook Dating Terms.
  • Clarification on the uses of special category data (no advertising using special category data and special category data collected in the dating feature will not be used by the core FB service);
  • Clarification that all other information will be used by Facebook in the normal manner across the Facebook platform in accordance with the FB terms of service;
  • Clarification on the processing of location data (location services has to be turned on for onboarding for safety and verification purpose but can then be turned off. Dating does not automatically update users’ Dating location in their Dating profile, even if the user chooses to have their location turned on for the wider Facebook service. Dating location does not use the user’s exact location, and is shown at a city level on the user’s Dating profile.).

EU parliament backs tighter rules on behavioural ads

By Natasha Lomas

The EU parliament has backed a call for tighter regulations on behavioral ads (aka microtargeting) in favor of less intrusive, contextual forms of advertising — urging Commission lawmakers to also assess further regulatory options, including looking at a phase-out leading to a full ban.

MEPs also want Internet users to be able to opt out of algorithmic content curation altogether.

The legislative initiative, introduced by the Legal Affairs committee, sets the parliament on a collision course with the business model of tech giants Facebook and Google.

Parliamentarians also backed a call for the Commission to look at options for setting up a European entity to monitor and impose fines to ensure compliance with rebooted digital rules — voicing support for a single, pan-EU Internet regulator to keep platforms in line.

The votes by the elected representatives of EU citizens are non-binding but send a clear signal to Commission lawmakers who are busy working on an update to existing ecommerce rules, via the forthcoming Digital Service Act (DSA) package — due to be introduced next month.

The DSA is intended to rework the regional rule book for digital services, including tackling controversial issues such as liability for user-generated content and online disinformation. And while only the Commission can propose laws, the DSA will need to gain the backing of the EU parliament (and the Council) if it is to go the legislative distance so the executive needs to take note of MEPs’ views.

Battle over adtech

The mass surveillance of Internet users for ad targeting — a space that’s dominated by Google and Facebook — looks set to be a major battleground as Commission lawmakers draw up the DSA package.

Last month Facebook’s policy VP Nick Clegg, a former MEP himself, urged regional lawmakers to look favorably on a business model he couched as “personalized advertising” — arguing that behavioral ad targeting allows small businesses to level the playing field with better resourced rivals.

However the legality of the model remains under legal attack on multiple fronts in the EU.

Scores of complaints have been lodged with EU data protection agencies over the mass exploitation of Internet users’ data by the adtech industry since the General Data Protection Regulation (GDPR) begun being applied — with complaints raising questions over the lawfulness of the processing and the standard of consent claimed.

Just last week, a preliminary report by Belgium’s data watchdog found that a flagship tool for gathering Internet users’ consent to ad tracking that’s operated by the IAB Europe fails to meet the required GDPR standard.

The use of Internet users’ personal data in the high velocity information exchange at the core of programmatic’s advertising’s real-time-bidding (RTB) process is also being probed by Ireland’s DPC, following a series of complaints. The UK’s ICO has warned for well over a year of systemic problems with RTB too.

Meanwhile some of the oldest unresolved GDPR complaints pertain to so-called ‘forced consent’ by Facebook  — given GDPR’s requirement that for consent to be lawful it must be freely given. Yet Facebook does not offer any opt-out from behavioral targeting; the ‘choice’ it offers is to use its service or not use it.

Google has also faced complaints over this issue. And last year France’s CNIL fined it $57M for not providing sufficiently clear info to Android users over how it was processing their data. But the key question of whether consent is required for ad targeting remains under investigation by Ireland’s DPC almost 2.5 years after the original GDPR complaint was filed — meaning the clock is ticking on a decision.

And still there’s more: Facebook’s processing of EU users’ personal data in the US also faces huge legal uncertainty because of the clash between fundamental EU privacy rights and US surveillance law.

A major ruling (aka Schrems II) by Europe’s top court this summer has made it clear EU data protection agencies have an obligation to step in and suspend transfers of personal data to third countries when there’s a risk the information is not adequately protected. This led to Ireland’s DPC sending Facebook a preliminary order to suspend EU data transfers.

Facebook has used the Irish courts to get a stay on that while it seeks a judiciary review of the regulator’s process — but the overarching legal uncertainty remains. (Not least because the complainant, angry that data continues to flow, has also been granted a judicial review of the DPC’s handling of his original complaint.)

There has also been an uptick in EU class actions targeting privacy rights, as the GDPR provides a framework that litigation funders feel they can profit off of.

All this legal activity focused on EU citizens’ privacy and data rights puts pressure on Commission lawmakers not to be seen to row back standards as they shape the DSA package — with the parliament now firing its own warning shot calling for tighter restrictions on intrusive adtech.

It’s not the first such call from MEPs, either. This summer the parliament urged the Commission to “ban platforms from displaying micro-targeted advertisements and to increase transparency for users”. And while they’ve now stepped away from calling for an immediate outright ban, yesterday’s votes were preceded by more detailed discussion — as parliamentarians sought to debate in earnest with the aim of influencing what ends up in the DSA package.

Ahead of the committee votes, online ad standards body, the IAB Europe, also sought to exert influence — putting out a statement urging EU lawmakers not to increase the regulatory load on online content and services.

“A facile and indiscriminate condemnation of ‘tracking’ ignores the fact that local, generalist press whose investigative reporting holds power to account in a democratic society, cannot be funded with contextual ads alone, since these publishers do not have the resources to invest in lifestyle and other features that lend themselves to  contextual targeting,” it suggested.

“Instead of adding redundant or contradictory provisions to the current rules, IAB Europe urges EU policymakers and regulators to work with the industry and support existing legal compliance standards such as the IAB Europe Transparency & Consent Framework [TCF], that can even help regulators with enforcement. The DSA should rather tackle clear problems meriting attention in the online space,” it added in the statement last month.

However, as we reported last week, the IAB Europe’s TCF has been found not to comply with existing EU standards following an investigation by the Belgium DPA’s inspectorate service — suggesting the tool offers quite the opposite of ‘model’ GDPR compliance. (Although a final decision by the DPA is pending.)

The EU parliament’s Civil Liberties committee also put forward a non-legislative resolution yesterday, focused on fundamental rights — including support for privacy and data protection — that gained MEPs’ backing.

Its resolution asserted that microtargeting based on people’s vulnerabilities is problematic, as well as raising concerns over the tech’s role as a conduit in the spreading of hate speech and disinformation.

The committee got backing for a call for greater transparency on the monetisation policies of online platforms.

‘Know your business customer’

Other measures MEPs supported in the series of votes yesterday included a call to set up a binding ‘notice-and-action’ mechanism so Internet users can notify online intermediaries about potentially illegal online content or activities — with the possibility of redress via a national dispute settlement body.

While MEPs rejected the use of upload filters or any form of ex-ante content control for harmful or illegal content. — saying the final decision on whether content is legal or not should be taken by an independent judiciary, not by private undertakings.

They also backed dealing with harmful content, hate speech and disinformation via enhanced transparency obligations on platforms and by helping citizens acquire media and digital literacy so they’re better able to navigate such content.

A push by the parliament’s Internal Market Committee for a ‘Know Your Business Customer’ principle to be introduced — to combat the sale of illegal and unsafe products online — also gained MEPs’ backing, with parliamentarians supporting measures to make platforms and marketplaces do a better job of detecting and taking down false claims and tackling rogue traders.

Parliamentarians also supported the introduction of specific rules to prevent (not merely remedy) market failures caused by dominant platform players as a means of opening up markets to new entrants — signalling support for the Commission’s plan to introduce ex ante rules for ‘gatekeeper’ platforms.

Liability for ‘high risk’ AI

The parliament also backed a legislative initiative recommending rules for AI — urging Commission lawmakers to present a new legal framework outlining the ethical principles and legal obligations to be followed when developing, deploying and using artificial intelligence, robotics and related technologies in the EU including for software, algorithms and data.

The Commission has made it clear it’s working on such a framework, setting out a white paper this year — with a full proposal expected in 2021.

MEPs backed a requirement that ‘high-risk’ AI technologies, such as those with self-learning capacities, be designed to allow for human oversight at any time — and called for a future-oriented civil liability framework that would make those operating such tech strictly liable for any resulting damage.

The parliament agreed such rules should apply to physical or virtual AI activity that harms or damages life, health, physical integrity, property, or causes significant immaterial harm if it results in “verifiable economic loss”.

Facebook is working on Neighborhoods, a Nextdoor clone based on local groups

By Ingrid Lunden

Using social networks to connect with neighbors and local services has surged during the Covid-19 pandemic, and Facebook — with 2.7 billion users globally — is now looking at how it can tap into that in a more direct way. In the same week that it was reported that Nextdoor is reportedly gearing up to go public, Facebook has started to test a Nextdoor clone, Neighborhoods, which suggests Facebook-generated Neighborhood groups (with a capital N, more on that below) local to you to join to connect with people, activities and things being sold in the area.

“More than ever, people are using Facebook to participate in their local communities. To help make it easier to do this, we are rolling out a limited test of Neighborhoods, a dedicated space within Facebook for people to connect with their neighbors,” said a spokesperson in a written statement provided to TechCrunch.

Facebook said that Neighborhoods currently is live only in Calgary, Canada, where it is being tested before getting rolled out more broadly.

The feature — which appears in the Menu of the main Facebook app, alongside tiles for Marketplace, Groups, Friends, Pages, Events and the rest — was first seen widely via a post on Twitter from social media strategy guy Matt Navarra, who in turn had been tipped off by a social media strategist from Calgary, Leon Grigg from Grigg Digital.

From Grigg’s public screenshots, it appears that Neighborhood groups — that is, local groups that are part of this new Neighborhood feature — are like those on Nextdoor, based on actual geographical areas on a map.

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From the looks of it, these Neighborhood groups appear to be triggered to “open” once there are enough people in the area to have joined, just like on Nextdoor. But unlike those on Nextdoor, and unlike Facebook groups, they are not created, built and run by admins, nor do they have “Community Ambassadors” (Nextdoor’s term). They are instead generated by Facebook itself.

Facebook said it will also suggest other local groups, although it’s not clear if these will simply be other Neighborhood groups, or local Groups that already exist on the platform, nor what this would mean for all those neighborhood Groups (small n) were Facebook’s new feature to launch more widely. We’re asking and will update as we hear back.

For now, Neighborhood groups require more permissions from you the user, and seem to be more presented rather than something you would organically find as you might a Group today.

Screenshots from Grigg’s Facebook post also show that after you click on Neighborhoods, you are asked to confirm your location to Facebook (sharing your location data being also a way to provide more data points for the company to profile you for advertising and marketing purposes).

It then suggests a Neighborhood to you to join, and also provides a list of other Neighborhood groups that are nearby, plus some ground rules for good behavior. If a Neighborhood isn’t live yet because not enough people have joined, you can invite more people to join it.

Facebook notes that when you post in a Neighborhood group, people see your specific Neighborhood profile and your posts there, but it doesn’t automatically mean they see your normal Facebook profile. You can change what gets seen in privacy settings.

Facebook then takes you through some suggested posts that you might make for other Neighborhoods, or to populate yours once it is live. (Examples in the screenshots include sharing pictures of carved pumpkins, and offering tips on local places.)

Tapping into an already-huge feature: Groups

Through Neighborhoods, Facebook is doubling down on one of the most popular ways that the social network is already being used — and by an increasing number of people, one of the only ways that it’s being used these days — via Groups, which bypass your own social graph and connect you with other kinds of communities.

Earlier this month during Facebook’s Communities Summit, CEO Mark Zuckerberg said that there were more than 1.8 billion people engaging with Groups at least once a month on the social network, with more than 70 million group admins and moderators putting in unpaid hours to manage them (hello, fellow mods and admins).

“We’re going to make communities as central to the FB experience as friends and family,” Zuckerberg said back in 2019 and repeated again this month.

As Sarah pointed out back in 2014, when Groups had a mere 500 million users and communities was not at the core of Facebook’s mission statement, Facebook Groups sometimes feels like you’re on a whole different social network, where you are establishing connections with people outside of your personal “social graph” of friends, family and colleagues, and are more broadly connecting with specific communities, whether they are based on where you live or a specific interest.

That role has only grown in 2020, with many people turning to local groups during the Covid-19 global health pandemic to connect with local resources, mutual aid groups, and simply to check in with each other.

Or, to complain: my own local group that I help admin did all of the above, but also a place for people to virtually hand-wring about the crowded (and illegal) festival atmosphere in the local park, and then to galvanise feedback and support, which helped us as a community present the problem to our local councillors to get the situation (sort of, finally) resolved.

A lot of Groups use is at its best organic, not prompted or productized by Facebook, so with Neighborhoods, it seems the company is now exploring ways to more proactively, inorganically dig into that role.

That may not be a surprise. On one side, consider how many people have decided to stop sharing as much on Facebook as before, and the role that Facebook has been playing in the great misinformation-disguised-as-news heist of the century. On the other, consider how Facebook has been building out its Marketplace and providing more resources for local businesses to spur them to advertise. Building an anchor for all that with Neighborhoods makes complete commercial sense.

Knocking Nextdoor

The timing of the feature is also notable for another reason. While Facebook is vast in size and scope compared to Nextdoor, the latter has found a kind of groove in recent times. The public swing towards looking for more local resources online has meant that Nextdoor, fighting its own bad reputation as a place where people go to confirm their worst fears, make racist comments in the name of public service, and look for lost pets, has found a second life.

Things like building neighborhood assistance programs and taking a public stand on social issues has helped Nextdoor reinvent itself as the good guy. Now covering some 268,000 neighborhoods, the company is riding that wave and reportedly eyeing a public listing via SPAC at a $4 billion – $5 billion valuation.

Yes, maybe that’s just a button compared to the full suit that is Facebook. But given that Facebook already has so many of the threads of a Nextdoor-type product already there on its platform, it’s a no-brainer that it would try to knit them together.

Instagram rolls out fan badges for live videos, expands IGTV ads test

By Sarah Perez

Instagram is today introducing a new way for creators to make money. The company is now rolling out badges in Instagram Live to an initial group of over 50,000 creators, who will be able to offer their fans the ability to purchase badges during their live videos to stand out in the comments and show their support.

The idea to monetize using fan badges is not unique to Instagram. Other live streaming platforms, including Twitch and YouTube, have similar systems. Facebook Live also allows fans to purchase stars on live videos, as a virtual tipping mechanism.

Instagram users will see three options to purchase a badge during live videos: badges that cost $0.99, $1.99, or $4.99.

On Instagram Live, badges will not only call attention to the fans’ comments, they also unlock special features, Instagram says. This includes a placement on a creator’s list of badge holders and access to a special heart badge.

The badges and list make it easier for creators to quickly see which fans are supporting their efforts, and give them a shout-out, if desired.

Image Credits: Instagram

To kick off the roll out of badges, Instagram says it will also temporarily match creator earnings from badge purchases during live videos, starting in November. Creators @ronnebrown and @youngezee are among those who are testing badges.

The company says it’s not taking a revenue share at launch, but as it expands its test of badges it will explore revenue share in the future.

“Creators push culture forward. Many of them dedicate their life to this, and it’s so important to us that they have easy ways to make money from their content,” said Instagram COO Justin Osofsky, in a statement. “These are additional steps in our work to make Instagram the single best place for creators to tell their story, grow their audience, and make a living,” she added.

Additionally, Instagram today is expanding access to its IGTV ads test to more creators. This program, introduced this spring, allows creators to earn money by including ads alongside their videos. Today, creators keep at least 55% of that revenue, Instagram says.

The introduction of badges and IGTV ads were previously announced, with Instagram saying it would test the former with a small group of creators earlier this year.

The changes follow what’s been a period of rapid growth on Instagram’s live video platform, as creators and fans sheltered at home during the coronavirus pandemic, which had cancelled live events, large meetups, concerts, and more.

During the pandemic’s start, for example, Instagram said Live creators saw a 70% increase in video views from Feb. to March, 2020. In Q2, Facebook also reported monthly active user growth (from 2.99B to 3.14B in Q1) that it said reflected increased engagement from consumers who were spending more time at home.

Gowalla is being resurrected as an augmented reality social app

By Lucas Matney

Gowalla is coming back.

The startup, which longtime TechCrunch readers will likely recall, was an ambitious consumer social app that excited Silicon Valley investors but ultimately floundered in its quest to take on Foursquare before an eventual $3 million acquihire in 2011 brought the company’s talent to Facebook.

The story certainly seemed destined to end there, but founder Josh Williams tells TechCrunch that he has decided to revive the Gowalla name and build on its ultimate vision by leaning on augmented reality tech.

“I really don’t think [Gowalla’s vision] has been fully realized at all, which is why I still want to scratch this itch,” Williams tells TechCrunch. “It was frankly really difficult to see it shut down.”

After a stint at Facebook, another venture-backed startup and a few other gigs, Williams has reacquired the Gowalla name, and is resurrecting the company with the guidance of co-founder Patrick Piemonte, a former Apple interface designer who previously founded an AR startup called Mirage. The new company was incubated inside Form Capital, a small design-centric VC fund operated by Williams and Bobby Goodlatte .

Founders Patrick Piemonte (left) and Josh Williams (right). Image credit: Josh Williams.

Williams hopes that AR can bring the Gowalla brand new life.

Despite significant investment from Facebook, Apple and Google, augmented reality is still seen as a bit of a gamble with many proponents estimating mass adoption to be several years out. Apple’s ARKit developer platform has yielded few wins despite hefty investment and Pokémon Go — the space’s sole consumer smash hit — is growing old.

“The biggest AR experience out there is Pokémon Go, and it’s now over six years old,” Williams says. “It’s moved the space forward a lot but is still very early in terms of what we’re going to see.”

Williams was cryptic when it came to details for what exactly the new augmented reality platform would look like when it launches. He did specify that it will feel more like a gamified social app than a social game, though he also lists the Nintendo franchise Animal Crossing as one of the platform’s foundational inspirations.

A glimpse of the branding for the new Gowalla. Image credit: Josh Williams

“It’s not a game with bosses or missions or levels, but rather something that you can experience,” Williams says. “How do you blend augmented reality and location? How do you see the world through somebody else’s eyes?”

A location-based social platform will likely rely on users actually going places, and the pandemic has largely dictated the app’s launch timing. Today, Gowalla is launching a waitlist, Williams says the app itself will launch in beta “in a number of cities” sometime in the first-half of next year. The team is also trying something unique with a smaller paid beta group called the “Street Team,” which will give users paying a flat $49 fee early access to Gowalla as well as “VIP membership,” membership to a private Discord group and some branded swag. A dedicated Street Team app will also launch in December.

The Justice Department has filed its antitrust lawsuit against Google

By Jonathan Shieber

The Justice Department said it has filed its long-awaited antitrust lawsuit against Google, confirming an earlier report from The Wall Street Journal.

In the suit, the Justice Department is expected to argue that Google used anticompetitive practices to safeguard its monopoly position as the dominant force in search and search-advertising, which sit at the foundation of the company’s extensive advertising, data mining, video distribution, and information services conglomerate.

It would be the first significant legal challenge that Google has faced from U.S. regulators despite years of investigations into the company’s practices.

A 2012 attempt to bring the company to the courts to answer for anti-competitive practices was ultimately scuttled because regulators at the time weren’t sure they could make the case stick. Since that time Alphabet’s value has skyrocketed to reach over $1 trillion (as of today’s share price).

Alphabet, Google’s parent company, holds a commanding lead in both search and video. The company dominates the search market — with roughly 90% of the world’s internet searches conducted on its platform — and roughly three quarters of American adults turn to YouTube for video, as the Journal reported.

In the lawsuit, the Department of Justice will say that Alphabet’s Google subsidiary uses a web of exclusionary business agreements to shut out competitors. The billions of dollars that the search giant collects wind up paying mobile phone companies, carriers and browsers to make the Google search engine a preset default. That blocks competitors from being able to access the kinds of queries and traffic they’d need to refine their own search engine.

It will be those relationships — alongside Google’s insistence that its search engine come pre-loaded (and un-deletable) on phones using the Android operating system and that other search engines specifically not be pre-loaded — that form part of the government’s case, according to Justice Department officials cited by the Journal.

The antitrust suit comes on the heels of a number of other regulatory actions involving Google, which is not only the dominant online search provider, but also a leader in online advertising and in mobile technology by way of Android, as well as a strong player in a web of other interconnected services like mapping, online productivity software, cloud computing and more.

MOUNTAIN VIEW, UNITED STATES – 2020/02/23: American multinational technology company Google logo seen at Google campus. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)

A report last Friday in Politico noted that Democrat Attorneys General would not be signing the suit. That report said those AGs have instead been working on a bipartisan, state-led approach covering a wider number of issues beyond search — the idea being also that more suits gives government potentially a stronger bargaining position against the tech giant.

A third suit is being put together by the state of Texas, although that has faced its own issues.

While a number of tech leviathans are facing increasing scrutiny from Washington, with the US now just two weeks from Election Day, it’s unlikely that we are going to see many developments around this and other cases before then. And in the case of this specific Google suit, in the event that Trump doesn’t get re-elected, there will also be a larger personnel shift at the DoJ that could also change the profile and timescale of the case.

In any event, fighting these regulatory cases is always a long, drawn-out process. In Europe, Google has faced a series of fines over antitrust violations stretching back several years, including a $2.7 billion fine over Google shopping; a $5 billion fine over Android dominance; and a $1.7 billion fine over search ad brokering. While Goolge slowly works through appeals, there are also more cases ongoing against the company in Europe and elsewhere.

Google is not the only one catching the attention of Washington. Earlier in October, the House Judiciary Committee released a report of more than 400 pages in which it outlined how tech giants Apple, Amazon, Alphabet (Google’s parent company) and Facebook were abusing their power, covering everything from the areas in which they dominate, through to suggestions for how to fix the situation (including curtailing their acquisitions strategy).

That seemed mainly to be an exercise in laying out the state of things, which could in turn be used to inform further actions, although in itself, unlike the DoJ suit, the House report lacks teeth in terms of enforcement or remedies.

Vectary, a design platform for 3D and AR, raises $7.3M from EQT and Blueyard

By Mike Butcher

Vectary, a design platform for 3D and Augmented Reality (AR), has raised a $7.3 million round led by European fund EQT Ventures. Existing investor BlueYard (Berlin) also participated.

Vectary makes high-quality 3D design more accessible for consumers, garnering over one million creators worldwide, and has more than a thousand digital agencies and creative studios as users.

With the coronavirus pandemic shifting more people online, Vectary says it has seen a 300% increase in AR views as more businesses start showcasing their products in 3D and AR.

Vectary was founded in 2014 by Michal Koor (CEO) and Pavol Sovis (CTO), who were both from the design and technology worlds.

The complexity of using and sharing content created by traditional 3D design tools has been a barrier to the adoption of 3D, which is what Vectary addresses.

Although Microsoft, Facebook and Apple are making it easier for consumers, the creative tools remain lacking. Vectary believes that seamless 3D/AR content creation and sharing will be key to mainstream adoption.

Designers and creatives can use Vectary to apply 2D design on a 3D object in Figma or Sketch; create 3D customizers in Webflow with Embed API; and add 3D interactivity to decks.

Daily Crunch: Pakistan un-bans TikTok

By Anthony Ha

TikTok returns to Pakistan, Apple launches a music-focused streaming station and SpaceX launches more Starlink satellites. This is your Daily Crunch for October 19, 2020.

The big story: Pakistan un-bans TikTok

The Pakistan Telecommunication Authority blocked the video app 11 days ago, over what it described as “immoral,” “obscene” and “vulgar” videos. The authority said today that it’s lifting the ban after negotiating with TikTok management.

“The restoration of TikTok is strictly subject to the condition that the platform will not be used for the spread of vulgarity/indecent content & societal values will not be abused,” it continued.

This isn’t the first time this year the country tried to crack down on digital content. Pakistan announced new internet censorship rules this year, but rescinded them after Facebook, Google and Twitter threatened to leave the country.

The tech giants

Apple launches a US-only music video station, Apple Music TV —  The new music video station offers a free, 24-hour live stream of popular music videos and other music content.

Google Cloud launches Lending DocAI, its first dedicated mortgage industry tool — The tool is meant to help mortgage companies speed up the process of evaluating a borrower’s income and asset documents.

Facebook introduces a new Messenger API with support for Instagram — The update means businesses will be able to integrate Instagram messaging into the applications and workflows they’re already using in-house to manage their Facebook conversations.

Startups, funding and venture capital

SpaceX successfully launches 60 more Starlink satellites, bringing total delivered to orbit to more than 800 — That makes 835 Starlink satellites launched thus far, though not all of those are operational.

Singapore tech-based real estate agency Propseller raises $1.2M seed round — Propseller combines a tech platform with in-house agents to close transactions more quickly.

Ready Set Raise, an accelerator for women built by women, announces third class — Ready Set Raise has changed its programming to be more focused on a “realistic fundraising process” vetted by hundreds of women.

Advice and analysis for Extra Crunch

Are VCs cutting checks in the closing days of the 2020 election? — Several investors told TechCrunch they were split about how they’re making these decisions.

Disney+ UX teardown: Wins, fails and fixes — With the help of Built for Mars founder and UX expert Peter Ramsey, we highlight some of the things Disney+ gets right and things that should be fixed.

Late-stage deals made Q3 2020 a standout VC quarter for US-based startups — Investors backed a record 88 megarounds of $100 million or more.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

US charges Russian hackers blamed for Ukraine power outages and the NotPetya ransomware attack — Prosecutors said the group of hackers, who work for the Russian GRU, are behind the “most disruptive and destructive series of computer attacks ever attributed to a single group.”

Stitcher’s podcasts arrive on Pandora with acquisition’s completion — SiriusXM today completed its previously announced $325 million acquisition of podcast platform Stitcher from E.W. Scripps, and has now launched Stitcher’s podcasts on Pandora.

Original Content podcast: It’s hard to resist the silliness of ‘Emily in Paris’ — The show’s Paris is a fantasy, but it’s a fantasy that we’re happy to visit.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Who regulates social media?

By Devin Coldewey

Social media platforms have repeatedly found themselves in the United States government’s crosshairs over the last few years, as it has been progressively revealed just how much power they really wield, and to what purposes they’ve chosen to wield it. But unlike, say, a firearm or drug manufacturer, there is no designated authority that says what these platforms can and can’t do. So who regulates them? You might say everyone and no one.

Now, it must be made clear at the outset that these companies are by no means “unregulated,” in that no legal business in this country is unregulated. For instance Facebook, certainly a social media company, received a record $5 billion fine last year for failure to comply with rules set by the FTC. But not because the company violated its social media regulations — there aren’t any.

Facebook and others are bound by the same rules that most companies must follow, such as generally agreed-upon definitions of fair business practices, truth in advertising, and so on. But industries like medicine, energy, alcohol and automotive have additional rules, indeed entire agencies, specific to them; not so with social media companies.

I say “social media” rather than “tech” because the latter is much too broad a concept to have a single regulator. Although Google and Amazon (and Airbnb, and Uber, and so on) need new regulation as well, they may require a different specialist, like an algorithmic accountability office or online retail antitrust commission. (Inasmuch as tech companies act within regulated industries, such as Google in broadband, they are already regulated as such.)

Social media can roughly be defined as platforms where people sign up to communicate and share messages and media, and that’s quite broad enough already without adding in things like ad marketplaces, competition quashing and other serious issues.

Who, then, regulates these social media companies? For the purposes of the U.S., there are four main directions from which meaningful limitations or policing may emerge, but each one has serious limitations, and none was actually created for the task.

1. Federal regulators

Image Credits: Andrew Harrer/Bloomberg

The Federal Communications Commission and Federal Trade Commission are what people tend to think of when “social media” and “regulation” are used in a sentence together. But one is a specialist — not the right kind, unfortunately — and the other a generalist.

The FCC, unsurprisingly, is primarily concerned with communication, but due to the laws that created it and grant it authority, it has almost no authority over what is being communicated. The sabotage of net neutrality has complicated this somewhat, but even the faction of the Commission dedicated to the backwards stance adopted during this administration has not argued that the messages and media you post are subject to their authority. They have indeed called for regulation of social media and big tech — but are for the most part unwilling and unable to do so themselves.

The Commission’s mandate is explicitly the cultivation of a robust and equitable communications infrastructure, which these days primarily means fixed and mobile broadband (though increasingly satellite services as well). The applications and businesses that use that broadband, though they may be affected by the FCC’s decisions, are generally speaking none of the agency’s business, and it has repeatedly said so.

The only potentially relevant exception is the much-discussed Section 230 of the Communications Decency Act (an amendment to the sprawling Communications Act), which waives liability for companies when illegal content is posted to their platforms, as long as those companies make a “good faith” effort to remove it in accordance with the law.

But this part of the law doesn’t actually grant the FCC authority over those companies or define good faith, and there’s an enormous risk of stepping into unconstitutional territory, because a government agency telling a company what content it must keep up or take down runs full speed into the First Amendment. That’s why although many think Section 230 ought to be revisited, few take seriously Trump’s feeble executive actions along these lines.

The agency did announce that it will be reviewing the prevailing interpretation of Section 230, but until there is some kind of established statutory authority or Congress-mandated mission for the FCC to look into social media companies, it simply can’t.

The FTC is a different story. As watchdog over business practices at large, it has a similar responsibility toward Twitter as it does toward Nabisco. It doesn’t have rules about what a social media company can or can’t do any more than it has rules about how many flavors of Cheez-It there should be. (There are industry-specific “guidelines” but these are more advisory about how general rules have been interpreted.)

On the other hand, the FTC is very much the force that comes into play should Facebook misrepresent how it shares user data, or Nabisco overstates the amount of real cheese in its crackers. The agency’s most relevant responsibility to the social media world is that of enforcing the truthfulness of material claims.

You can thank the FTC for the now-familiar, carefully worded statements that avoid any real claims or responsibilities: “We take security very seriously” and “we think we have the best method” and that sort of thing — so pretty much everything that Mark Zuckerberg says. Companies and executives are trained to do this to avoid tangling with the FTC: “Taking security seriously” isn’t enforceable, but saying “user data is never shared” certainly is.

In some cases this can still have an effect, as in the $5 billion fine recently dropped into Facebook’s lap (though for many reasons that was actually not very consequential). It’s important to understand that the fine was for breaking binding promises the company had made — not for violating some kind of social-media-specific regulations, because again, there really aren’t any.

The last point worth noting is that the FTC is a reactive agency. Although it certainly has guidelines on the limits of legal behavior, it doesn’t have rules that when violated result in a statutory fine or charges. Instead, complaints filter up through its many reporting systems and it builds a case against a company, often with the help of the Justice Department. That makes it slow to respond compared with the lightning-fast tech industry, and the companies or victims involved may have moved beyond the point of crisis while a complaint is being formalized there. Equifax’s historic breach and minimal consequences are an instructive case:

So: While the FCC and FTC do provide important guardrails for the social media industry, it would not be accurate to say they are its regulators.

2. State legislators

States are increasingly battlegrounds for the frontiers of tech, including social media companies. This is likely due to frustration with partisan gridlock in Congress that has left serious problems unaddressed for years or decades. Two good examples of states that lost their patience are California’s new privacy rules and Illinois’s Biometric Information Privacy Act (BIPA).

The California Consumer Privacy Act (CCPA) was arguably born out the ashes of other attempts at a national level to make companies more transparent about their data collection policies, like the ill-fated Broadband Privacy Act.

California officials decided that if the feds weren’t going to step up, there was no reason the state shouldn’t at least look after its own. By convention, state laws that offer consumer protections are generally given priority over weaker federal laws — this is so a state isn’t prohibited from taking measures for their citizens’ safety while the slower machinery of Congress grinds along.

The resulting law, very briefly stated, creates formal requirements for disclosures of data collection, methods for opting out of them, and also grants authority for enforcing those laws. The rules may seem like common sense when you read them, but they’re pretty far out there compared to the relative freedom tech and social media companies enjoyed previously. Unsurprisingly, they have vocally opposed the CCPA.

BIPA has a somewhat similar origin, in that a particularly far-sighted state legislature created a set of rules in 2008 limiting companies’ collection and use of biometric data like fingerprints and facial recognition. It has proven to be a huge thorn in the side of Facebook, Microsoft, Amazon, Google and others that have taken for granted the ability to analyze a user’s biological metrics and use them for pretty much whatever they want.

Many lawsuits have been filed alleging violations of BIPA, and while few have produced notable punishments like this one, they have been invaluable in forcing the companies to admit on the record exactly what they’re doing, and how. Sometimes it’s quite surprising! The optics are terrible, and tech companies have lobbied (fortunately, with little success) to have the law replaced or weakened.

What’s crucially important about both of these laws is that they force companies to, in essence, choose between universally meeting a new, higher standard for something like privacy, or establishing a tiered system whereby some users get more privacy than others. The thing about the latter choice is that once people learn that users in Illinois and California are getting “special treatment,” they start asking why Mainers or Puerto Ricans aren’t getting it as well.

In this way state laws exert outsize influence, forcing companies to make changes nationally or globally because of decisions that technically only apply to a small subset of their users. You may think of these states as being activists (especially if their attorneys general are proactive), or simply ahead of the curve, but either way they are making their mark.

This is not ideal, however, because taken to the extreme, it produces a patchwork of state laws created by local authorities that may conflict with one another or embody different priorities. That, at least, is the doomsday scenario predicted almost universally by companies in a position to lose out.

State laws act as a test bed for new policies, but tend to only emerge when movement at the federal level is too slow. Although they may hit the bullseye now and again, like with BIPA, it would be unwise to rely on a single state or any combination among them to miraculously produce, like so many simian legislators banging on typewriters, a comprehensive regulatory structure for social media. Unfortunately, that leads us to Congress.

3. Congress

Image Credits: Bryce Durbin/TechCrunch

What can be said about the ineffectiveness of Congress that has not already been said, again and again? Even in the best of times few would trust these people to establish reasonable, clear rules that reflect reality. Congress simply is not the right tool for the job, because of its stubborn and willful ignorance on almost all issues of technology and social media, its countless conflicts of interest and its painful sluggishness — sorry, deliberation — in actually writing and passing any bills, let alone good ones.

Companies oppose state laws like the CCPA while calling for national rules because they know that it will take forever and there’s more opportunity to get their finger in the pie before it’s baked. National rules, in addition to coming far too late, are much more likely also to be watered down and riddled with loopholes by industry lobbyists. (This is indicative of the influence these companies wield over their own regulation, but it’s hardly official.)

But Congress isn’t a total loss. In moments of clarity it has established expert agencies like those in the first item, which have Congressional oversight but are otherwise independent, empowered to make rules, and kept technically — if somewhat limply — nonpartisan.

Unfortunately, the question of social media regulation is too recent for Congress to have empowered a specialist agency to address it. Social media companies don’t fit neatly into any of the categories that existing specialists regulate, something that is plainly evident by the present attempt to stretch Section 230 beyond the breaking point just to put someone on the beat.

Laws at the federal level are not to be relied on for regulation of this fast-moving industry, as the current state of things shows more than adequately. And until a dedicated expert agency or something like it is formed, it’s unlikely that anything spawned on Capitol Hill will do much to hold back the Facebooks of the world.

4. European regulators

eu gdpr 1

Image Credits: Natasha Lomas

Of course, however central it considers itself to be, the U.S. is only a part of a global ecosystem of various and shifting priorities, leaders and legal systems. But in a sort of inside-out version of state laws punching above their weight, laws that affect a huge part of the world except the U.S. can still have a major effect on how companies operate here.

The most obvious example is the General Data Protection Regulation, or GDPR, a set of rules, or rather augmentation of existing rules dating to 1995, that has begun to change the way some social media companies do business.

But this is only the latest step in a fantastically complex, decades-long process that must harmonize the national laws and needs of the EU member states in order to provide the clout it needs to compel adherence to the international rules. Red tape seldom bothers tech companies, which rely on bottomless pockets to plow through or in-born agility to dance away.

Although the tortoise may eventually in this case overtake the hare in some ways, at present the GDPR’s primary hindrance is not merely the complexity of its rules, but the lack of decisive enforcement of them. Each country’s Data Protection Agency acts as a node in a network that must reach consensus in order to bring the hammer down, a process that grinds slow and exceedingly fine.

When the blow finally lands, though, it may be a heavy one, outlawing entire practices at an industry-wide level rather than simply extracting pecuniary penalties these immensely rich entities can shrug off. There is space for optimism as cases escalate and involve heavy hitters like antitrust laws in efforts that grow to encompass the entire “big tech” ecosystem.

The rich tapestry of European regulations is really too complex of a topic to address here in the detail it deserves, and also reaches beyond the question of who exactly regulates social media. Europe’s role in that question of, if you will, speaking slowly and carrying a big stick promises to produce results on a grand scale, but for the purposes of this article it cannot really be considered an effective policing body.

(TechCrunch’s EU regulatory maven Natasha Lomas contributed to this section.)

5. No one? Really?

As you can see, the regulatory ecosystem in which social media swims is more or less free of predators. The most dangerous are the small, agile ones — state legislatures — that can take a bite before the platforms have had a chance to brace for it. The other regulators are either too slow, too compromised or too involved (or some combination of the three) to pose a real threat. For this reason it may be necessary to introduce a new, but familiar, species: the expert agency.

As noted above, the FCC is the most familiar example of one of these, though its role is so fragmented that one could be forgiven for forgetting that it was originally created to ensure the integrity of the telephone and telegraph system. Why, then, is it the expert agency for orbital debris? That’s a story for another time.

Capitol building

Image Credits: Bryce Durbin/TechCrunch

What is clearly needed is the establishment of an independent expert agency or commission in the U.S., at the federal level, that has statutory authority to create and enforce rules pertaining to the handling of consumer data by social media platforms.

Like the FCC (and somewhat like the EU’s DPAs), this should be officially nonpartisan — though like the FCC it will almost certainly vacillate in its allegiance — and should have specific mandates on what it can and can’t do. For instance, it would be improper and unconstitutional for such an agency to say this or that topic of speech should be disallowed from Facebook or Twitter. But it would be able to say that companies need to have a reasonable and accessible definition of the speech they forbid, and likewise a process for auditing and contesting takedowns. (The details of how such an agency would be formed and shaped is well beyond the scope of this article.)

Even the likes of the FAA lags behind industry changes, such as the upsurge in drones that necessitated a hasty revisit of existing rules, or the huge increase in commercial space launches. But that’s a feature, not a bug. These agencies are designed not to act unilaterally based on the wisdom and experience of their leaders, but are required to perform or solicit research, consult with the public and industry alike, and create evidence-based policies involving, or at least addressing, a minimum of sufficiently objective data.

Sure, that didn’t really work with net neutrality, but I think you’ll find that industries have been unwilling to capitalize on this temporary abdication of authority by the FCC because they see that the Commission’s current makeup is fighting a losing battle against voluminous evidence, public opinion and common sense. They see the writing on the wall and understand that under this system it can no longer be ignored.

With an analogous authority for social media, the evidence could be made public, the intentions for regulation plain, and the shareholders — that is to say, users — could make their opinions known in a public forum that isn’t owned and operated by the very companies they aim to rein in.

Without such an authority these companies and their activities — the scope of which we have only the faintest clue to — will remain in a blissful limbo, picking and choosing by which rules to abide and against which to fulminate and lobby. We must help them decide, and weigh our own priorities against theirs. They have already abused the naïve trust of their users across the globe — perhaps it’s time we asked them to trust us for once.

The OpenStack Foundation becomes the Open Infrastructure Foundation

By Frederic Lardinois

This has been a long time coming, but the OpenStack Foundation today announced that it is changing its name to “Open Infrastructure Foundation,” starting in 2021.

The announcement, which the foundation made at its virtual developer conference, doesn’t exactly come as a surprise. Over the course of the last few years, the organization started adding new projects that went well beyond the core OpenStack project, and renamed its conference to the “Open Infrastructure Summit.” The organization actually filed for the “Open Infrastructure Foundation” trademark back in April.

Image Credits: OpenStack Foundation

After years of hype, the open-source OpenStack project hit a bit of a wall in 2016, as the market started to consolidate. The project itself, which helps enterprises run their private cloud, found its niche in the telecom space, though, and continues to thrive as one of the world’s most active open-source projects. Indeed, I regularly hear from OpenStack vendors that they are now seeing record sales numbers — despite the lack of hype. With the project being stable, though, the Foundation started casting a wider net and added additional projects like the popular Kata Containers runtime and CI/CD platform Zuul.

“We are officially transitioning and becoming the Open Infrastructure Foundation,” long-term OpenStack Foundation executive president Jonathan Bryce told me. “That is something that I think is an awesome step that’s built on the success that our community has spawned both within projects like OpenStack, but also as a movement […], which is [about] how do you give people choice and control as they build out digital infrastructure? And that is, I think, an awesome mission to have. And that’s what we are recognizing and acknowledging and setting up for another decade of doing that together with our great community.”

In many ways, it’s been more of a surprise that the organization waited as long as it did. As the foundation’s COO Mark Collier told me, the team waited because it wanted to be sure that it did this right.

“We really just wanted to make sure that all the stuff we learned when we were building the OpenStack community and with the community — that started with a simple idea of ‘open source should be part of cloud, for infrastructure.’ That idea has just spawned so much more open source than we could have imagined. Of course, OpenStack itself has gotten bigger and more diverse than we could have imagined,” Collier said.

As part of today’s announcement, the group also announced that its board approved four new members at its Platinum tier, its highest membership level: Ant Group, the Alibaba affiliate behind Alipay, embedded systems specialist Wind River, China’s FiberHome (which was previously a Gold member) and Facebook Connectivity. These companies will join the new foundation in January. To become a Platinum member, companies must contribute $350,000 per year to the foundation and have at least two full-time employees contributing to its projects.

“If you look at those companies that we have as Platinum members, it’s a pretty broad set of organizations,” Bryce noted. “AT&T, the largest carrier in the world. And then you also have a company Ant, who’s the largest payment processor in the world and a massive financial services company overall — over to Ericsson, that does telco, Wind River, that does defense and manufacturing. And I think that speaks to that everybody needs infrastructure. If we build a community — and we successfully structure these communities to write software with a goal of getting all of that software out into production, I think that creates so much value for so many people: for an ecosystem of vendors and for a great group of users and a lot of developers love working in open source because we work with smart people from all over the world.”

The OpenStack Foundation’s existing members are also on board and Bryce and Collier hinted at several new members who will join soon but didn’t quite get everything in place for today’s announcement.

We can probably expect the new foundation to start adding new projects next year, but it’s worth noting that the OpenStack project continues apace. The latest of the project’s bi-annual releases, dubbed “Victoria,” launched last week, with additional Kubernetes integrations, improved support for various accelerators and more. Nothing will really change for the project now that the foundation is changing its name — though it may end up benefitting from a reenergized and more diverse community that will build out projects at its periphery.

We need universal digital ad transparency now

By Walter Thompson
Laura Edelson Contributor
Laura Edelson is a PhD Candidate in Computer Science at NYU’s Tandon School of Engineering and is a team member on The Online Political Transparency Project.
Erika Franklin Fowler Contributor
Erika Franklin Fowler is Professor of Government at Wesleyan University where she directs the Wesleyan Media Project (WMP), which tracks and analyzes political advertising in real-time during elections.
Jason Chuang Contributor
Jason Chuang is a researcher at Mozilla.

Dear Mr. Zuckerberg, Mr. Dorsey, Mr. Pichai and Mr. Spiegel: We need universal digital ad transparency now!

The negative social impacts of discriminatory ad targeting and delivery are well-known, as are the social costs of disinformation and exploitative ad content. The prevalence of these harms has been demonstrated repeatedly by our research. At the same time, the vast majority of digital advertisers are responsible actors who are only seeking to connect with their customers and grow their businesses.

Many advertising platforms acknowledge the seriousness of the problems with digital ads, but they have taken different approaches to confronting those problems. While we believe that platforms need to continue to strengthen their vetting procedures for advertisers and ads, it is clear that this is not a problem advertising platforms can solve by themselves, as they themselves acknowledge. The vetting being done by the platforms alone is not working; public transparency of all ads, including ad spend and targeting information, is needed so that advertisers can be held accountable when they mislead or manipulate users.

Our research has shown:

  • Advertising platform system design allows advertisers to discriminate against users based on their gender, race and other sensitive attributes.
  • Platform ad delivery optimization can be discriminatory, regardless of whether advertisers attempt to set inclusive ad audience preferences.
  • Ad delivery algorithms may be causing polarization and make it difficult for political campaigns to reach voters with diverse political views.
  • Sponsors spent more than $1.3 billion dollars on digital political ads, yet disclosure is vastly inadequate. Current voluntary archives do not prevent intentional or accidental deception of users.

While it doesn’t take the place of strong policies and rigorous enforcement, we believe transparency of ad content, targeting and delivery can effectively mitigate many of the potential harms of digital ads. Many of the largest advertising platforms agree; Facebook, Google, Twitter and Snapchat all have some form of an ad archive. The problem is that many of these archives are incomplete, poorly implemented, hard to access by researchers and have very different formats and modes of access. We propose a new standard for universal ad disclosure that should be met by every platform that publishes digital ads. If all platforms commit to the universal ad transparency standard we propose, it will mean a level playing field for platforms and advertisers, data for researchers and a safer internet for everyone.

The public deserves full transparency of all digital advertising. We want to acknowledge that what we propose will be a major undertaking for platforms and advertisers. However, we believe that the social harms currently being borne by users everywhere vastly outweigh the burden universal ad transparency would place on ad platforms and advertisers. Users deserve real transparency about all ads they are bombarded with every day. We have created a detailed description of what data should be made transparent that you can find here.

We researchers stand ready to do our part. The time for universal ad transparency is now.

Signed by:

Jason Chuang, Mozilla
Kate Dommett, University of Sheffield
Laura Edelson, New York University
Erika Franklin Fowler, Wesleyan University
Michael Franz, Bowdoin College
Archon Fung, Harvard University
Sheila Krumholz, Center for Responsive Politics
Ben Lyons, University of Utah
Gregory Martin, Stanford University
Brendan Nyhan, Dartmouth College
Nate Persily, Stanford University
Travis Ridout, Washington State University
Kathleen Searles, Louisiana State University
Rebekah Tromble, George Washington University
Abby Wood, University of Southern California

With ‘absurd’ timing, FCC announces intention to revisit Section 230

By Devin Coldewey

FCC Chairman Ajit Pai has announced his intention to pursue a reform of Section 230 of the Communications Act, which among other things limits the liability of internet platforms for content they host. Commissioner Rosenworcel described the timing — immediately after Conservative outrage at Twitter and Facebook limiting the reach of an article relating to Hunter Biden — as “absurd.” But it’s not necessarily the crackdown the Trump administration clearly desires.

In a statement, Chairman Pai explained that “members of all three branches of the federal government have expressed serious concerns about the prevailing interpretation of the immunity set forth in Section 230,” and that there is broad support for changing the law — in fact there are already several bills under consideration that would do so.

At issue is the legal protections for platforms when they decide what content to allow and what to block. Some say they are clearly protected by the First Amendment (this is how it is currently interpreted), while others assert that some of those choices amount to violations of users’ right to free speech.

Though Pai does not mention specific recent circumstances in which internet platforms have been accused of having partisan bias in one direction or the other, it is difficult to imagine they — and the constant needling of the White House — did not factor into the decision.

A long road with an ‘unfortunate detour’

In fact the push to reform Section 230 has been progressing for years, with the limitations of the law and the FCC’s interpretation of its pertinent duties discussed candidly by the very people who wrote the original bill and thus have considerable insight into its intentions and shortcomings.

In June Commissioner Starks disparaged pressure from the White House to revisit the FCC’s interpretation of the law, saying that the First Amendment protections are clear and that Trump’s executive order “seems inconsistent with those core principles.” That said, he proposed that the FCC take the request to reconsider the law seriously.

“And if, as I suspect it ultimately will, the petition fails at a legal question of authority,” he said, “I think we should say it loud and clear, and close the book on this unfortunate detour. Let us avoid an upcoming election season that can use a pending proceeding to, in my estimation, intimidate private parties.”

The latter part of his warning seems especially prescient given the choice by the Chairman to open proceedings less than three weeks before the election, and the day after Twitter and Facebook exercised their authority as private platforms to restrict the distribution of articles which, as Twitter belatedly explained, clearly broke guidelines on publishing private information. (The New York Post article had screenshots of unredacted documents with what appeared to be Hunter Biden’s personal email and phone number, among other things.)

Commissioner Rosenworcel did not mince words, saying “The timing of this effort is absurd. The FCC has no business being the President’s speech police.” Starks echoed her, saying “We’re in the midst of an election… the FCC shouldn’t do the President’s bidding here.” (Trump has repeatedly called for the “repeal” of Section 230, which is just part of a much larger and important set of laws.)

Considering the timing and the utter impossibility of reaching any kind of meaningful conclusion before the election — rulemaking is at a minimum a months-long process — it is hard to see Pai’s announcement as anything but a pointed warning to internet platforms. Platforms which, it must be stressed, the FCC has essentially no regulatory powers over.

Foregone conclusion

The Chairman telegraphed his desired outcome clearly in the announcement, saying “Many advance an overly broad interpretation that in some cases shields social media companies from consumer protection laws in a way that has no basis in the text of Section 230… Social media companies have a First Amendment right to free speech. But they do not have a First Amendment right to a special immunity denied to other media outlets, such as newspapers and broadcasters.”

Whether the FCC has anything to do with regulating how these companies exercise that right remains to be seen, but it’s clear that Pai thinks the agency should, and doesn’t. With the makeup of the FCC currently 3:2 in favor of the Conservative faction, it may be said that this rulemaking is a forgone conclusion; the net neutrality debacle showed that these Commissioners are willing to ignore and twist facts in order to justify the end they choose, and there’s no reason to think this rulemaking will be any different.

The process will be just as drawn out and public as previous ones, however, which means that a cavalcade of comments may yet again indicate that the FCC ignores public opinion, experts, and lawmakers alike in its decision to invent or eliminate its roles as it sees fit. Be ready to share your feedback with the FCC, but no need to fire up the outrage just yet — chances are this rulemaking won’t even exist in draft form until after the election, at which point there may be something of a change in the urgency of this effort to reinterpret the law to the White House’s liking.

Brazil’s Black Silicon Valley could be an epicenter of innovation in Latin America

By Walter Thompson
Paulo Rogério Nunes Contributor
Paulo is the co-founder of Vale do Dendê (Dende Valley) and AFAR Ventures, a global diversity and inclusion creative and consulting agency that identifies opportunities for multinational brands, corporations and investors in emerging markets.
Tara Sabre Collier Contributor
Tara Sabre Collier is an early-stage impact investor with more than 15 years of experience at the intersection of economic development, social entrepreneurship and impact investment. She is a Visiting Fellow of Oxford University where she teaches and writes about impact investing, diversity and equity.

Over the last five years, Brazil has witnessed a startup boom.

The main startups hubs in the country have traditionally been São Paulo and Belo Horizonte, but now a new wave of cities are building their own thriving local startup ecosystems, including Recife with Porto Digital hub and Florianópolis with Acate. More recently, a “Black Silicon Valley” is beginning to take shape in Salvador da Bahia.

While finance and media are typically concentrated in São Paulo and Rio de Janeiro, Salvador, a city of three million in the state of Bahia, is considered one of Brazil’s cultural capitals.

With an 84% Afro-Brazilian population, there are deep, rich and visible roots of Africa in the city’s history, music, cuisine and culture. The state of Bahia is almost the size of France and has 15 million people. Bahia’s creative legacy is quite clear, given that almost all the big Brazilian cultural patrimonies have their roots here, from samba and capoeira to various regional delicacies.

Many people are unaware that Brazil has the largest Black population in any country outside of Africa. Like counterparts in the U.S. and across the Americas, Afro-Brazilians have long struggled for socio-economic equity. As with counterparts in the United States, Brazil’s Black founders have less access to capital.

According to research by professor Marcelo Paixão for the Inter-American Development Bank, Afro-Brazilians are three times more likely to have their credit denied than their white counterparts. Afro-Brazilians also have over twice the poverty rates of white Brazilians and only a handful of Afro-Brazilians have held legislative positions, despite comprising more than 50% of the population. Not to mention, they make up less than 5% of the top level of the top 500 companies. Compared with countries like the United States or the United Kingdom, the racial funding gap is even more stark as more than 50% of  Brazil’s population is classified as Afro-Brazilian.

Bahia could be an epicenter of innovation in Latin America

Salvador (Bahia’s capital) is the natural birthplace of Brazil’s Black Silicon Valley, which largely centers around a local ecosystem hub, Vale do Dendê.

Vale do Dendê coordinates with local startups, investors and government agencies to support entrepreneurship and innovation and runs startup acceleration programs specifically focusing on supporting Afro-Brazilian founders. The Vale do Dendê Accelerator organization has already been in the spotlight at international and national publications because of its innovative work in bringing startup and tech education from mainstream to traditionally underserved communities.

In almost three years, the accelerator has supported 90 companies directly that cut across various industries, with high representation from the creative and social impact sectors. Almost all of the companies have achieved double-digit growth and various companies have gone on to raise further funding or corporate backing. One of the first portfolio companies, TrazFavela, a delivery app that focuses on linking customers and goods from traditionally marginalized communities, was supported by the accelerator in 2019. Despite the lockdown, the business grew 230% between the period of March and May after incubation and recently signed an agreement for further support and investment from Google Brasil.

There is a clear recognition of the business case for Afro-Brazilian businesses. Another company supported in the beginning with mentoring by Vale do Dendê is Diaspora Black (which focuses on Black culture in the tourism sectors). It attracted backing from Facebook Brasil and grew 770% in 2020.

The same is true for AfroSaúde, a health tech company focused on low-income communities with a new service to prevent COVID-19 in favelas (urban slums, which incidentally have high Black representation). The app now has more than 1,000 Black health professionals on its platform, creating jobs while addressing a health crisis that had been tremendously racialized.

We’re at the brink of a renaissance here in Bahia

Despite Brazil’s challenging economic situation, large national and global companies and investors are taking notice of this startup boom. Major IT company Qintess has come on board as a major sponsor to help Salvador become the leading Black tech hub in Latin America.

The company announced an investment of around 10 million reais (nearly $2 million USD) over the next five years in Black startups, including a collaboration with Vale do Dendê to train around 2,000 people in tech and accelerate more than 500 startups led by Black founders. Also, in September, Google launched a 5 million reais (around $1 million USD) Black Founders Fund with the support of Vale do Dendê to boost the Afro-Brazilian startup ecosystem.

There is no doubt that the new wave of innovation will come from the emerging markets, and the African Diaspora can play an important role. With the world’s largest African diaspora population in the hemisphere, Brazil can be a major leader on this. Vale do Dendê is keen to build partnerships to make Brazil and Latin America a more representative startup and creative economy ecosystem.

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