It’s been a long time coming but Facebook is finally feeling some heat from Europe’s much trumpeted data protection regime: Ireland’s Data Protection Commission (DPC) has just announced a €225 million (~$267M) for WhatsApp.
The Facebook-owned messaging app has been under investigation by the Irish DPC, its lead data supervisor in the European Union, since December 2018 — several months after the first complaints were fired at WhatsApp over how it processes user data under Europe’s General Data Protection Regulation (GDPR), once it begun being applied in May 2018.
Despite receiving a number of specific complaints about WhatsApp, the investigation undertaken by the DPC that’s been decided today was what’s known as an “own volition” enquiry — meaning the regulator selected the parameters of the investigation itself, choosing to fix on an audit of WhatsApp’s ‘transparency’ obligations.
A key principle of the GDPR is that entities which are processing people’s data must be clear, open and honest with those people about how their information will be used.
The DPC’s decision today (which runs to a full 266 pages) concludes that WhatsApp failed to live up to the standard required by the GDPR.
Its enquiry considered whether or not WhatsApp fulfils transparency obligations to both users and non-users of its service (WhatsApp may, for example, upload the phone numbers of non-users if a user agrees to it ingesting their phone book which contains other people’s personal data); as well as looking at the transparency the platform offers over its sharing of data with its parent entity Facebook (a highly controversial issue at the time the privacy U-turn was announced back in 2016, although it predated GDPR being applied).
In sum, the DPC found a range of transparency infringements by WhatsApp — spanning articles 5(1)(a); 12, 13 and 14 of the GDPR.
In addition to issuing a sizeable financial penalty, it has ordered WhatsApp to take a number of actions to improve the level of transparency it offer users and non-users — giving the tech giant a three-month deadline for making all the ordered changes.
In a statement responding to the DPC’s decision, WhatsApp disputed the findings and dubbed the penalty “entirely disproportionate” — as well as confirming it will appeal, writing:
“WhatsApp is committed to providing a secure and private service. We have worked to ensure the information we provide is transparent and comprehensive and will continue to do so. We disagree with the decision today regarding the transparency we provided to people in 2018 and the penalties are entirely disproportionate. We will appeal this decision.”
It’s worth emphasizing that the scope of the DPC enquiry which has finally been decided today was limited to only looking at WhatsApp’s transparency obligations.
The regulator was explicitly not looking into wider complaints — which have also been raised against Facebook’s data-mining empire for well over three years — about the legal basis WhatsApp claims for processing people’s information in the first place.
So the DPC will continue to face criticism over both the pace and approach of its GDPR enforcement.
…system to add years until this fine will actually be paid – but at least it's a start… 10k cases per year to go!
— Max Schrems (@maxschrems) September 2, 2021
Indeed, prior to today, Ireland’s regulator had only issued one decision in a major cross-border cases addressing ‘Big Tech’ — against Twitter when, back in December, it knuckle-tapped the social network over a historical security breach with a fine of $550k.
WhatsApp’s first GDPR penalty is, by contrast, considerably larger — reflecting what EU regulators (plural) evidently consider to be a far more serious infringement of the GDPR.
Transparency is a key principle of the regulation. And while a security breach may indicate sloppy practice, systematic opacity towards people whose data your adtech empire relies upon to turn a fat profit looks rather more intentional; indeed, it’s arguably the whole business model.
And — at least in Europe — such companies are going to find themselves being forced to be up front about what they’re doing with people’s data.
The WhatsApp decision will rekindle the debate about whether the GDPR is working effectively where it counts most: Against the most powerful companies in the world, who are also of course Internet companies.
Under the EU’s flagship data protection regulation, decisions on cross border cases require agreement from all affected regulators — across the 27 Member States — so while the GDPR’s “one-stop-shop” mechanism seeks to streamline the regulatory burden for cross-border businesses by funnelling complaints and investigations via a lead regulator (typically where a company has its main legal establishment in the EU), objections can be raised to that lead supervisory authority’s conclusions (and any proposed sanctions), as has happened here, in this WhatsApp case.
Ireland originally proposed a far more low-ball penalty of up to €50M for WhatsApp. However other EU regulators objected to the draft decision on a number of fronts — and the European Data Protection Board (EDPB) ultimately had to step in and take a binding decision (issued this summer) to settle the various disputes.
Through that (admittedly rather painful) joint-working, the DPC was required to increase the size of the fine issued to WhatsApp. In a mirror of what happened with its draft Twitter decision — where the DPC has also suggested an even tinier penalty in the first instance.
While there is a clear time cost in settling disputes between the EU’s smorgasbord of data protection agencies — the DPC submitted its draft WhatsApp decision to the other DPAs for review back in December, so it’s taken well over half a year to hash out all the disputes about WhatsApp’s lossy hashing and so forth — the fact that ‘corrections’ are being made to its decisions and conclusions can land — if not jointly agreed but at least arriving via a consensus being pushed through by the EDPB — is a sign that the process, while slow and creaky, is working.
Even so, Ireland’s data watchdog will continue to face criticism for its outsized role in handling GDPR complaints and investigations — with some accusing the DPC of essentially cherry-picking which issues to examine in detail (by its choice and framing of cases) and which to elide entirely (by those issues it doesn’t open an enquiry into or complaints it simply drops or ignores), with its loudest critics arguing it’s therefore still a major bottleneck on effective enforcement of data protection rights across the EU. And the associated conclusion for that critique is that tech giants like Facebook are still getting a pretty free pass to violate Europe’s privacy rules.
But while it’s true that a $267M penalty is still the equivalent of a parking ticket for Facebook, orders to change how such adtech giants are able to process people’s information have the potential to be a far more significant correction on problematic business models. Again, though, time will be needed to tell.
In a statement on the WhatsApp decision today, noyb — the privacy advocay group founded by long-time European privacy campaigner Max Schrems, said: “We welcome the first decision by the Irish regulator. However, the DPC gets about ten thousand complaints per year since 2018 and this is the first major fine. The DPC also proposed an initial €50MK fine and was forced by the other European data protection authorities to move towards €225M, which is still only 0.08% of the turnover of the Facebook Group. The GDPR foresees fines of up to 4% of the turnover. This shows how the DPC is still extremely dysfunctional.”
Schrems also noted that he and noyb still have a number of pending cases before the DPC — including on WhatsApp.
In further remarks, Schrems and noyb said: “WhatsApp will surely appeal the decision. In the Irish court system this means that years will pass before any fine is actually paid. In our cases we often had the feeling that the DPC is more concerned with headlines than with actually doing the hard groundwork. It will be very interesting to see if the DPC will actually defend this decision fully, as it was basically forced to make this decision by its European counterparts. I can imagine that the DPC will simply not put many resources on the case or ‘settle’ with WhatsApp in Ireland. We will monitor this case closely to ensure that the DPC is actually following through with this decision.”
This is the second post in a series on the Facebook monopoly. The first post explored how the U.S. Federal Trade Commission should define the Facebook monopoly. I am inspired by Cloudflare’s recent post explaining the impact of Amazon’s monopoly in its industry.
Perhaps it was a competitive tactic, but I genuinely believe it more a patriotic duty: guideposts for legislators and regulators on a complex issue. My generation has watched with a combination of sadness and trepidation as legislators who barely use email question the leading technologists of our time about products that have long pervaded our lives in ways we don’t yet understand.
I, personally, and my company both stand to gain little from this — but as a participant in the latest generation of social media upstarts, and as an American concerned for the future of our democracy, I feel a duty to try.
Mark Zuckerberg has reached his Key Largo moment.
In May 1972, executives of the era’s preeminent technology company — AT&T — met at a secret retreat in Key Largo, Florida. Their company was in crisis.
At the time, Ma Bell’s breathtaking monopoly consisted of a holy trinity: Western Electric (the vast majority of phones and cables used for American telephony), the lucrative long distance service (for both personal and business use) and local telephone service, which the company subsidized in exchange for its monopoly.
Over the next decade, all three government branches — legislators, regulators and the courts — parried with AT&T’s lawyers as the press piled on, battering the company’s reputation in the process. By 1982, a consent decree forced AT&T’s dismantling. The biggest company on earth withered to 30% of its book value and seven independent “Baby Bell” regional operating companies. AT&T’s brand would live on, but the business as the world knew it was dead.
Mark Zuckerberg is, undoubtedly, the greatest technologist of our time. For over 17 years, he has outgunned, outsmarted and outperformed like no software entrepreneur before him. Earlier this month, the U.S. Federal Trade Commission refiled its sweeping antitrust case against Facebook.
Its own holy trinity of Facebook Blue, Instagram and WhatsApp is under attack. All three government branches — legislators, regulators and the courts — are gaining steam in their fight, and the press is piling on, battering the company’s reputation in the process. Facebook, the AT&T of our time, is at the brink. For so long, Zuckerberg has told us all to move fast and break things. It’s time for him to break Facebook.
If Facebook does exist to “make the world more open and connected, and not just to build a company,” as Zuckerberg wrote in the 2012 IPO prospectus, he will spin off Instagram and WhatsApp now so that they have a fighting chance. It would be the ultimate Zuckerbergian chess move. Zuckerberg would lose voting control and thus power over all three entities, but in his action he would successfully scatter the opposition. The rationale is simple:
I write this as an admirer; I genuinely believe much of the criticism Zuckerberg has received is unfair. Facebook faces Sisyphean tasks. The FTC will not let Zuckerberg sneeze without an investigation, and the company has failed to innovate.
Given no chance to acquire new technology and talent, how can Facebook survive over the long term? In 2006, Terry Semel of Yahoo offered $1 billion to buy Facebook. Zuckerberg reportedly remarked, “I just don’t know if I want to work for Terry Semel.” Even if the FTC were to allow it, this generation of founders will not sell to Facebook. Unfair or not, Mark Zuckerberg has become Terry Semel.
It is not a matter of if; it is a matter of when.
In a speech on the floor of Congress in 1890, Senator John Sherman, the founding father of the modern American antitrust movement, famously said, “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life. If we would not submit to an emperor, we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.”
This is the sentiment driving the building resistance to Facebook’s monopoly, and it shows no sign of abating. Zuckerberg has proudly called Facebook the fifth estate. In the U.S., we only have four estates.
All three branches of the federal government are heating up their pursuit. In the Senate, an unusual bipartisan coalition is emerging, with Senators Amy Klobuchar (D-MN), Mark Warner (D-VA), Elizabeth Warren (D-MA) and Josh Hawley (R-MO) each waging a war from multiple fronts.
In the House, Speaker Nancy Pelosi (D-CA) has called Facebook “part of the problem.” Lina Khan’s FTC is likewise only getting started, with unequivocal support from the White House that feels burned by Facebook’s disingenuous lobbying. The Department of Justice will join, too, aided by state attorneys general. And the courts will continue to turn the wheels of justice, slowly but surely.
In the wake of Facebook co-founder Chris Hughes’ scathing 2019 New York Times op-ed, Zuckerberg said that Facebook’s immense size allows it to spend more on trust and safety than Twitter makes in revenue.
“If what you care about is democracy and elections, then you want a company like us to be able to invest billions of dollars per year like we are in building up really advanced tools to fight election interference,” Zuckerberg said.
This could be true, but it does not prove that the concentration of such power in one man’s hands is consistent with U.S. public policy. And the centralized operations could be rebuilt easily in standalone entities.
Time and time again, whether on Holocaust denial, election propaganda or vaccine misinformation, Zuckerberg has struggled to make quick judgments when presented with the information his trust and safety team uncovers. And even before a decision is made, the structure of the team disincentivizes it from even measuring anything that could harm Facebook’s brand. This is inherently inconsistent with U.S. democracy. The New York Times’ army of reporters will not stop uncovering scandal after scandal, contradicting Zuckerberg’s narrative. The writing is on the wall.
Facebook Blue, Instagram and WhatsApp all face existential threats. Pressure from the government will stifle Facebook’s efforts to right the ship.
For so long, Facebook has dominated the social media industry. But if you ask Chinese technology executives about Facebook today, they quote Tencent founder Pony Ma: “When a giant falls, his corpse will still be warm for a while.”
Facebook’s recent demise begins with its brand. The endless, cascading scandals of the last decade have irreparably harmed its image. Younger users refuse to adopt the flagship Facebook Blue. The company’s internal polling on two key metrics — good for the world (GFW) and cares about users (CAU) — shows Facebook’s reputation is in tatters. Talent is fleeing, too; Instacart alone recently poached 55 Facebook executives.
In 2012 and 2014, Instagram and WhatsApp were real dangers. Facebook extinguished both through acquisition. Yet today they represent the company’s two most promising, underutilized assets. They are the underinvested telephone networks of our time.
Weeks ago, Instagram head Adam Mosseri announced that the company no longer considers itself a photo-sharing app. Instead, its focus is entertainment. In other words, as the media widely reported, Instagram is changing to compete with TikTok.
TikTok’s strength represents an existential threat. U.S. children 4 to 15 already spend over 80 minutes a day on ByteDance’s TikTok, and it’s just getting started. The demographics are quickly expanding way beyond teenagers, as social products always have. For Instagram, it could be too little too late — as a part of Facebook, Instagram cannot acquire the technology and retain the talent it needs to compete with TikTok.
Imagine Instagram acquisitions of Squarespace to bolster its e-commerce offerings, or Etsy to create a meaningful marketplace. As a part of Facebook, Instagram is strategically adrift.
Likewise, a standalone WhatsApp could easily be a $100 billion market cap company. WhatsApp has a proud legacy of robust security offerings, but its brand has been tarnished by associations with Facebook. Discord’s rise represents a substantial threat, and WhatsApp has failed to innovate to account for this generation’s desire for community-driven messaging. Snapchat, too, is in many ways a potential WhatsApp killer; its young users use photography and video as a messaging medium. Facebook’s top augmented reality talents are leaving for Snapchat.
With 2 billion monthly active users, WhatApp could be a privacy-focused alternative to Facebook Blue, and it would logically introduce expanded profiles, photo-sharing capabilities and other features that would strengthen its offerings. Inside Facebook, WhatsApp has suffered from underinvestment as a potential threat to Facebook Blue and Messenger. Shareholders have suffered for it.
Beyond Instagram and WhatsApp, Facebook Blue itself is struggling. Q2’s earnings may have skyrocketed, but the increase in revenue hid a troubling sign: Ads increased by 47%, but inventory increased by just 6%. This means Facebook is struggling to find new places to run its ads. Why? The core social graph of Facebook is too old.
I fondly remember the day Facebook came to my high school; I have thousands of friends on the platform. I do not use Facebook anymore — not for political reasons, but because my friends have left. A decade ago, hundreds of people wished me happy birthday every year. This year it was 24, half of whom are over the age of 50. And I’m 32 years old. Teen girls run the social world, and many of them don’t even have Facebook on their phones.
Zuckerberg’s newfound push into the metaverse has been well covered, but the question remains: Why wouldn’t a Facebook serious about the metaverse acquire Roblox? Of course, the FTC would currently never allow it.
Facebook’s current clunky attempt at a hardware solution, with an emphasis on the workplace, shows little sign of promise. The launch was hardly propitious, as CNN reported, “While Bosworth, the Facebook executive, was in the middle of describing how he sees Workrooms as a more interactive way to gather virtually with coworkers than video chat, his avatar froze midsentence, the pixels of its digital skin turning from flesh-toned to gray. He had been disconnected.”
This is not the indomitable Facebook of yore. This is graying Facebook, freezing midsentence.
Zuckerberg’s control of 58% of Facebook’s voting shares has forestalled a typical Wall Street reckoning: Investors are tiring of Zuckerberg’s unilateral power. Many justifiably believe the company is more valuable as the sum of its parts. The success of AT&T’s breakup is a case in point.
Five years after AT&T’s 1984 breakup, AT&T and the Baby Bells’ value had doubled compared to AT&T’s pre-breakup market capitalization. Pressure from Japanese entrants battered Western Electric’s market share, but greater competition in telephony spurred investment and innovation among the Baby Bells.
AT&T turned its focus to competing with IBM and preparing for the coming information age. A smaller AT&T became more nimble, ready to focus on the future rather than dwell on the past.
Standalone Facebook Blue, Instagram and WhatsApp could drastically change their futures by attracting talent and acquiring new technologies.
Zuckerberg has always been one step ahead. And when he wasn’t, he was famously unprecious: “Copying is faster than innovating.” If he really believes in Facebook’s mission and recognizes that the situation cannot possibly get any better from here, he will copy AT&T’s solution before it is forced upon him.
Regulators are tying Zuckerberg’s hands behind his back as the company weathers body blows and uppercuts from Beijing to Silicon Valley. As Zuckerberg’s idol Augustus Caesar might have once said, carpe diem. It’s time to break Facebook.
A London-headquartered startup called LOVE, valued at $17 million following its pre-seed funding, aims to redefine how people stay in touch with close family and friends. The company is launching a messaging app that offers a combination of video calling as well as asynchronous video and audio messaging, in an ad-free, privacy-focused experience with a number of bells and whistles, including artistic filters and real-time transcription and translation features.
But LOVE’s bigger differentiator may not be its product alone, but rather the company’s mission.
LOVE aims for its product direction to be guided by its user base in a democratic fashion as opposed to having the decisions made about its future determined by an elite few at the top of some corporate hierarchy. In addition, the company’s longer-term goal is ultimately to hand over ownership of the app and its governance to its users, the company says.
These concepts have emerged as part of bigger trends towards a sort of “Web 3.0,” or next phase of internet development, where services are decentralized, user privacy is elevated, data is protected and transactions take place on digital ledgers, like a blockchain, in a more distributed fashion.
LOVE’s founders are proponents of this new model, including serial entrepreneur Samantha Radocchia, who previously founded three companies and was an early advocate for the blockchain as the co-founder of Chronicled, an enterprise blockchain company focused on the pharmaceutical supply chain.
As someone who’s been interested in emerging technology since her days of writing her anthropology thesis on currency exchanges in “Second Life’s” virtual world, she’s now faculty at Singularity University, where she’s given talks about blockchain, AI, Internet of Things, Future of Work, and other topics. She’s also authored an introductory guide to the blockchain with her book “Bitcoin Pizza.”
Co-founder Christopher Schlaeffer, meanwhile, held a number of roles at Deutsche Telekom, including chief product & innovation officer, corporate development officer and chief strategy officer, where he along with Google execs introduced the first mobile phone to run Android. He was also chief digital officer at the telecommunication services company VEON.
The two crossed paths after Schlaeffer had already begun the work of organizing a team to bring LOVE to the public, which includes co-founders Chief Technologist Jim Reeves, also previously of VEON, and Chief Designer Timm Kekeritz, previously an interaction designer at international design firm IDEO in San Francisco, design director at IXDS and founder of design consultancy Raureif in Berlin, among other roles.
Image Credits: LOVE
Explained Radocchia, what attracted her to join as CEO was the potential to create a new company that upholds more positive values than what’s often seen today — in fact, the brand name “LOVE” is a reference to this aim. She was also interested in the potential to think through what she describes as “new business models that are not reliant on advertising or harvesting the data of our users,” she says.
To that end, LOVE plans to monetize without any advertising. While the company isn’t ready to explain its business model in full, it would involve users opting in to services through granular permissions and membership, we’re told.
“We believe our users will much rather be willing to pay for services they consciously use and grant permissions to in a given context than have their data used for an advertising model which is simply not transparent,” says Radocchia.
LOVE expects to share more about the model next year.
As for the LOVE app itself, it’s a fairly polished mobile messenger offering an interesting combination of features. Like any other video chat app, you can video call with friends and family, either in one-on-one calls or in groups. Currently, LOVE supports up to five call participants, but expects to expand that as it scales. The app also supports video and audio messaging for asynchronous conversations. There are already tools that offer this sort of functionality on the market, of course — like WhatsApp, with its support for audio messages, or video messenger Marco Polo. But they don’t offer quite the same expanded feature set.
Image Credits: LOVE
For starters, LOVE limits its video messages to 60 seconds, for brevity’s sake. (As anyone who’s used Marco Polo knows, videos can become a bit rambling, which makes it harder to catch up when you’re behind on group chats.) In addition, LOVE allows you to both watch the video content as well as read the real-time transcription of what’s being said — the latter which comes in handy not only for accessibility’s sake, but also for those times you want to hear someone’s messages but aren’t in a private place to listen or don’t have headphones. Conversations can also be translated into 50 languages.
“A lot of the traditional communication or messenger products are coming from a paradigm that has always been text-based,” explains Radocchia. “We’re approaching it completely differently. So while other platforms have a lot of the features that we do, I think that…the perspective that we’ve approached it has completely flipped it on its head,” she continues. “As opposed to bolting video messages on to a primarily text-based interface, [LOVE is] actually doing it in the opposite way and adding text as a sort of a magically transcribed add-on — and something that you never, hopefully, need to be typing out on your keyboard again,” she adds.
The app’s user interface, meanwhile, has been designed to encourage eye-to-eye contact with the speaker to make conversations feel more natural. It does this by way of design elements where bubbles float around as you’re speaking and the bubble with the current speaker grows to pull your focus away from looking at yourself. The company is also working with the curator of Serpentine Gallery in London, Hans Ulrich-Obrist, to create new filters that aren’t about beautification or gimmicks, but are instead focused on introducing a new form of visual expression that makes people feel more comfortable on camera.
For the time being, this has resulted in a filter that slightly abstracts your appearance, almost in the style of animation or some other form of visual arts.
The app claims to use end-to-end encryption and the automatic deletion of its content after seven days — except for messages you yourself recorded, if you’ve chosen to save them as “memorable moments.”
“One of our commitments is to privacy and the right-to-forget,” says Radocchia. “We don’t want to be or need to be storing any of this information.”
LOVE has been soft-launched on the App Store, where it’s been used with a number of testers and is working to organically grow its user base through an onboarding invite mechanism that asks users to invite at least three people to join. This same onboarding process also carefully explains why LOVE asks for permissions — like using speech recognition to create subtitles.
LOVE says its valuation is around $17 million USD following pre-seed investments from a combination of traditional startup investors and strategic angel investors across a variety of industries, including tech, film, media, TV and financial services. The company will raise a seed round this fall.
The app is currently available on iOS, but an Android version will arrive later in the year. (Note that LOVE does not currently support the iOS 15 beta software, where it has issues with speech transcription and in other areas. That should be resolved next week, following an app update now in the works.)
To celebrate its ten year anniversary, Messenger today announced a handful of new features: poll games, word effects, contact sharing, and birthday gifting via Facebook Pay. But beyond the fun features, Facebook has been testing a way to add voice and video calls back into the Facebook app, rather than on Messenger.
“We are testing audio and video calls within the Facebook app messaging experience so people can make and receive calls regardless of which app they’re using,” a representative from Facebook told TechCrunch. “This will give people on Facebook easy ways to connect with their communities where they already are.”
Although earlier in Facebook history, the Messenger app had operated as a standalone experience, Facebook tells us that it’s now starting to see Messenger less as a separate entity — more of an underlying technology that can help to power many of the new experiences Facebook is now developing.
“We’ve been focused more on real-time experiences — Watch Together, Rooms, Live Audio Rooms — and we’ve started to think of Messenger as a connective tissue regardless of the surface,” a Facebook spokesperson told us. “This is a test, but the bigger vision is for us to unlock content and communities that may not be accessible in Messenger, and that the Facebook app is going to become more about shared real-time experiences,” they added.
Given the company’s move in recent months to integrate its underlying communication infrastructure, it should come to reason that Facebook would ultimately add more touchpoints for accessing its new Messenger-powered features inside the desktop app, as well. When asked for comment on this point, the spokesperson said the company didn’t have any details to share at this time. However, they noted that the test is a part of Facebook’s broader vision to enable more real-time experiences across Facebook’s services.
Despite the new integrations, the standalone version of Messenger isn’t going away.
Facebook says that people who want a more “full-featured” messaging, audio and video calling experience” should continue to use Messenger.
Image Credits: Messenger
As for today’s crop of new features — including polls, word effects, contact sharing, and others — the goal is to celebrate Messenger’s ability to keep people in touch with their family a friends.
To play the new poll games, users can tap “Polls” in their group chat and select the “Most Likely To” tab — then, they can choose from questions like “most likely to miss their flight?” or “most likely to give gifts on their own birthday?”, select names of chat participants to be included as potential answers, and send the poll.
Contact sharing will make it easier to share others’ Facebook contacts through Messenger, while birthday gifting lets users send birthday-themed payments on Messenger via Facebook Pay. There will also be other “birthday expression tools,” including a birthday song soundmoji, “Messenger is 10!” sticker pack, a new balloon background, a message effect, and AR effect to celebrate Messenger’s double-digit milestone.
Image Credits: Messenger
Meanwhile, word effects lets users manually input a phrase, and any time they send a message with that phrase, an accompanying emoji will float across the screen. In an example, Messenger showed the phrase “happy birthday” accompanied with a word effect of confetti emojis flooding the screen. (That one’s pretty tame, but this could be a remarkable application of the poop emoji.) The company only shared a “sneak peak” of this feature, as it’s not rolling out immediately.
In total, Facebook is announcing a total of ten features, most of which will begin rolling out today.
Messenger has come a long way over the past decade.
Ten years ago, Facebook acqui-hired a small group messaging start-up called Beluga, started by three former Google employees (apparently, a functional group thread was a white whale back then — simpler times). Several months later, the company unveiled Messenger, a standalone messaging app.
But three years into Messenger’s existence, it was no longer an optional add-on to the Facebook experience, but a mandatory download for anyone who wanted to keep up with their friends on the go. Facebook removed the option to send messages within its flagship app, directing users to use Messenger instead. Facebook’s reasoning behind this, the company told TechCrunch at the time, was that they wanted to eliminate the confusion of having two different mobile messaging systems. Just months earlier, Facebook had spent $19 billion to acquire WhatsApp and woo international users. Though removing Messenger from the Facebook app was controversial, the app reached 1.2 billion users three years later in 2017.
Today, Facebook has declared that it wants to evolve into a “metaverse” company, and on the same day as the anti-trust filing last week, Mark Zuckerberg unveiled a product that applies virtual reality in an impressively boring way: helping people attend work meetings. This metaverse would be enabled by technologies built by Facebook’s platform team, noted Vice President of Messenger Stan Chudnovsky. However, he added that people in the metaverse will still need platforms like Messenger.
“I don’t think messaging is going anywhere, even in the metaverse, because a asynchronous communication is going to continue to exist,” Chudnovsky said. People will still need to send messages to those who aren’t currently available to chat, he explained. Plus, Chudnovsky believes this sort of communication will become even more popular with the launch of the metaverse, as the technology will help to serve as a bridge between your phone, real life, and the metaverse.
“if anything is gonna happen more, not less. Because messaging is that things that just continues to grow with every new platform leap,” he said.
Additional reporting: Sarah Perez
With the hasty U.S. military withdrawal from Afghanistan underway after two decades occupying the country, social media platforms have a complex new set of policy decisions to make.
The Taliban has been social media-savvy for years, but those companies will face new questions as the notoriously brutal, repressive group seeks to present itself as Afghanistan’s legitimate governing body to the rest of the world. Given its ubiquity among political leaders and governments, social media will likely play an even more central role for the Taliban as it seeks to cement control and move toward governing.
Facebook has taken some early precautions to protect its users from potential reprisals as the Taliban seizes power. Through Twitter, Facebook’s Nathaniel Gleicher announced a set of new measures the platform rolled out over the last week. The company added a “one-click” way for people in Afghanistan to instantly lock their accounts, hiding posts on their timeline and preventing anyone they aren’t friends with from downloading or sharing their profile picture.
4/ We’ve launched a one-click tool for people in Afghanistan to quickly lock down their account. When their profile is locked, people who aren’t their friends can’t download or share their profile photo or see posts on their timeline. pic.twitter.com/pUANh5uBgn
— Nathaniel Gleicher (@ngleicher) August 19, 2021
Facebook also removed the ability for users to view and search anyone’s friends list for people located in Afghanistan. On Instagram, pop-up alerts will provide Afghanistan-based users with information on how to quickly lock down their accounts.
The Taliban has long been banned on Facebook under the company’s rules against dangerous organizations. “The Taliban is sanctioned as a terrorist organization under US law… This means we remove accounts maintained by or on behalf of the Taliban and prohibit praise, support, and representation of them,” a Facebook spokesperson told the BBC.
The Afghan Taliban is actually not designated as a foreign terrorist organization by the U.S. State Department, but the Taliban operating out of Pakistan has held that designation since 2010. While it doesn’t appear on the list of foreign terrorist organizations, the Afghanistan-based Taliban is defined as a terror group according to economic sanctions that the U.S. put in place after 9/11.
While the Taliban is also banned from Facebook-owned WhatsApp, the platform’s end-to-end encryption makes enforcing those rules on WhatsApp more complex. WhatsApp is ubiquitous in Afghanistan and both the Afghan military and the Taliban have relied on the chat app to communicate in recent years. Though Facebook doesn’t allow the Taliban on its platforms, the group turned to WhatsApp to communicate its plans to seize control to the Afghan people and discourage resistance in what was a shockingly swift and frictionless sprint to power. The Taliban even set up WhatsApp number as a sort of help line for Afghans to report violence or crime, but Facebook quickly shut down the account.
Earlier this week, Facebook’s VP of content policy Monika Bickert noted that even if the U.S. does ultimately remove the Taliban from its lists of sanctioned terror groups, the platform would reevaluate and make its own decision. “… We would have to do a policy analysis on whether or not they nevertheless violate our dangerous organizations policy,” Bickert said.
Like Facebook, YouTube maintains that the Taliban is banned from its platform. YouTube’s own decision also appears to align with sanctions and could be subject to change if the U.S. approach to the Taliban shifts.
“YouTube complies with all applicable sanctions and trade compliance laws, including relevant U.S. sanctions,” a YouTube spokesperson told TechCrunch. “As such, if we find an account believed to be owned and operated by the Afghan Taliban, we terminate it. Further, our policies prohibit content that incites violence.”
On Twitter, Taliban spokesperson Zabihullah Mujahid has continued to share regular updates about the group’s activities in Kabul. Another Taliban representative, Qari Yousaf Ahmadi, also freely posts on the platform. Unlike Facebook and YouTube, Twitter doesn’t have a blanket ban on the group but will enforce its policies on a post-by-post basis.
If the Taliban expands its social media footprint, other platforms might be facing the same set of decisions. TikTok did not respond to TechCrunch’s request for comment, but previously told NBC that it considers the Taliban a terrorist organization and does not allow content that promotes the group.
The Taliban doesn’t appear to have a foothold beyond the most mainstream social networks, but it’s not hard to imagine the former insurgency turning to alternative platforms to remake its image as the world looks on.
While Twitch declined to comment on what it might do if the group were to use the platform, it does have a relevant policy that takes “off-service conduct” into account when banning users. That policy was designed to address reports of abusive behavior and sexual harassment among Twitch streamers.
The new rules also apply to accounts linked to violent extremism, terrorism, or other serious threats, whether those actions take place on or off Twitch. That definition would likely preclude the Taliban from establishing a presence on the platform, even if the U.S. lifts sanctions or changes its terrorist designations in the future.
Facebook is a monopoly. Right?
Mark Zuckerberg appeared on national TV today to make a “special announcement.” The timing could not be more curious: Today is the day Lina Khan’s FTC refiled its case to dismantle Facebook’s monopoly.
To the average person, Facebook’s monopoly seems obvious. “After all,” as James E. Boasberg of the U.S. District Court for the District of Columbia put it in his recent decision, “No one who hears the title of the 2010 film ‘The Social Network’ wonders which company it is about.” But obviousness is not an antitrust standard. Monopoly has a clear legal meaning, and thus far Lina Khan’s FTC has failed to meet it. Today’s refiling is much more substantive than the FTC’s first foray. But it’s still lacking some critical arguments. Here are some ideas from the front lines.
To the average person, Facebook’s monopoly seems obvious. But obviousness is not an antitrust standard.
First, the FTC must define the market correctly: personal social networking, which includes messaging. Second, the FTC must establish that Facebook controls over 60% of the market — the correct metric to establish this is revenue.
Though consumer harm is a well-known test of monopoly determination, our courts do not require the FTC to prove that Facebook harms consumers to win the case. As an alternative pleading, though, the government can present a compelling case that Facebook harms consumers by suppressing wages in the creator economy. If the creator economy is real, then the value of ads on Facebook’s services is generated through the fruits of creators’ labor; no one would watch the ads before videos or in between posts if the user-generated content was not there. Facebook has harmed consumers by suppressing creator wages.
A note: This is the first of a series on the Facebook monopoly. I am inspired by Cloudflare’s recent post explaining the impact of Amazon’s monopoly in their industry. Perhaps it was a competitive tactic, but I genuinely believe it more a patriotic duty: guideposts for legislators and regulators on a complex issue. My generation has watched with a combination of sadness and trepidation as legislators who barely use email question the leading technologists of our time about products that have long pervaded our lives in ways we don’t yet understand. I, personally, and my company both stand to gain little from this — but as a participant in the latest generation of social media upstarts, and as an American concerned for the future of our democracy, I feel a duty to try.
According to the court, the FTC must meet a two-part test: First, the FTC must define the market in which Facebook has monopoly power, established by the D.C. Circuit in Neumann v. Reinforced Earth Co. (1986). This is the market for personal social networking services, which includes messaging.
Second, the FTC must establish that Facebook controls a dominant share of that market, which courts have defined as 60% or above, established by the 3rd U.S. Circuit Court of Appeals in FTC v. AbbVie (2020). The right metric for this market share analysis is unequivocally revenue — daily active users (DAU) x average revenue per user (ARPU). And Facebook controls over 90%.
The answer to the FTC’s problem is hiding in plain sight: Snapchat’s investor presentations:
Snapchat July 2021 investor presentation: Significant DAU and ARPU Opportunity. Image Credits: Snapchat
This is a chart of Facebook’s monopoly — 91% of the personal social networking market. The gray blob looks awfully like a vast oil deposit, successfully drilled by Facebook’s Standard Oil operations. Snapchat and Twitter are the small wildcatters, nearly irrelevant compared to Facebook’s scale. It should not be lost on any market observers that Facebook once tried to acquire both companies.
The FTC initially claimed that Facebook has a monopoly of the “personal social networking services” market. The complaint excluded “mobile messaging” from Facebook’s market “because [messaging apps] (i) lack a ‘shared social space’ for interaction and (ii) do not employ a social graph to facilitate users’ finding and ‘friending’ other users they may know.”
This is incorrect because messaging is inextricable from Facebook’s power. Facebook demonstrated this with its WhatsApp acquisition, promotion of Messenger and prior attempts to buy Snapchat and Twitter. Any personal social networking service can expand its features — and Facebook’s moat is contingent on its control of messaging.
The more time in an ecosystem the more valuable it becomes. Value in social networks is calculated, depending on whom you ask, algorithmically (Metcalfe’s law) or logarithmically (Zipf’s law). Either way, in social networks, 1+1 is much more than 2.
Social networks become valuable based on the ever-increasing number of nodes, upon which companies can build more features. Zuckerberg coined the “social graph” to describe this relationship. The monopolies of Line, Kakao and WeChat in Japan, Korea and China prove this clearly. They began with messaging and expanded outward to become dominant personal social networking behemoths.
In today’s refiling, the FTC explains that Facebook, Instagram and Snapchat are all personal social networking services built on three key features:
Unfortunately, this is only partially right. In social media’s treacherous waters, as the FTC has struggled to articulate, feature sets are routinely copied and cross-promoted. How can we forget Instagram’s copying of Snapchat’s stories? Facebook has ruthlessly copied features from the most successful apps on the market from inception. Its launch of a Clubhouse competitor called Live Audio Rooms is only the most recent example. Twitter and Snapchat are absolutely competitors to Facebook.
Messaging must be included to demonstrate Facebook’s breadth and voracious appetite to copy and destroy. WhatsApp and Messenger have over 2 billion and 1.3 billion users respectively. Given the ease of feature copying, a messaging service of WhatsApp’s scale could become a full-scale social network in a matter of months. This is precisely why Facebook acquired the company. Facebook’s breadth in social media services is remarkable. But the FTC needs to understand that messaging is a part of the market. And this acknowledgement would not hurt their case.
Boasberg believes revenue is not an apt metric to calculate personal networking: “The overall revenues earned by PSN services cannot be the right metric for measuring market share here, as those revenues are all earned in a separate market — viz., the market for advertising.” He is confusing business model with market. Not all advertising is cut from the same cloth. In today’s refiling, the FTC correctly identifies “social advertising” as distinct from the “display advertising.”
But it goes off the deep end trying to avoid naming revenue as the distinguishing market share metric. Instead the FTC cites “time spent, daily active users (DAU), and monthly active users (MAU).” In a world where Facebook Blue and Instagram compete only with Snapchat, these metrics might bring Facebook Blue and Instagram combined over the 60% monopoly hurdle. But the FTC does not make a sufficiently convincing market definition argument to justify the choice of these metrics. Facebook should be compared to other personal social networking services such as Discord and Twitter — and their correct inclusion in the market would undermine the FTC’s choice of time spent or DAU/MAU.
Ultimately, cash is king. Revenue is what counts and what the FTC should emphasize. As Snapchat shows above, revenue in the personal social media industry is calculated by ARPU x DAU. The personal social media market is a different market from the entertainment social media market (where Facebook competes with YouTube, TikTok and Pinterest, among others). And this too is a separate market from the display search advertising market (Google). Not all advertising-based consumer technology is built the same. Again, advertising is a business model, not a market.
In the media world, for example, Netflix’s subscription revenue clearly competes in the same market as CBS’ advertising model. News Corp.’s acquisition of Facebook’s early competitor MySpace spoke volumes on the internet’s potential to disrupt and destroy traditional media advertising markets. Snapchat has chosen to pursue advertising, but incipient competitors like Discord are successfully growing using subscriptions. But their market share remains a pittance compared to Facebook.
The FTC has correctly argued for the smallest possible market for their monopoly definition. Personal social networking, of which Facebook controls at least 80%, should not (in their strongest argument) include entertainment. This is the narrowest argument to make with the highest chance of success.
But they could choose to make a broader argument in the alternative, one that takes a bigger swing. As Lina Khan famously noted about Amazon in her 2017 note that began the New Brandeis movement, the traditional economic consumer harm test does not adequately address the harms posed by Big Tech. The harms are too abstract. As White House advisor Tim Wu argues in “The Curse of Bigness,” and Judge Boasberg acknowledges in his opinion, antitrust law does not hinge solely upon price effects. Facebook can be broken up without proving the negative impact of price effects.
However, Facebook has hurt consumers. Consumers are the workers whose labor constitutes Facebook’s value, and they’ve been underpaid. If you define personal networking to include entertainment, then YouTube is an instructive example. On both YouTube and Facebook properties, influencers can capture value by charging brands directly. That’s not what we’re talking about here; what matters is the percent of advertising revenue that is paid out to creators.
YouTube’s traditional percentage is 55%. YouTube announced it has paid $30 billion to creators and rights holders over the last three years. Let’s conservatively say that half of the money goes to rights holders; that means creators on average have earned $15 billion, which would mean $5 billion annually, a meaningful slice of YouTube’s $46 billion in revenue over that time. So in other words, YouTube paid creators a third of its revenue (this admittedly ignores YouTube’s non-advertising revenue).
Facebook, by comparison, announced just weeks ago a paltry $1 billion program over a year and change. Sure, creators may make some money from interstitial ads, but Facebook does not announce the percentage of revenue they hand to creators because it would be insulting. Over the equivalent three-year period of YouTube’s declaration, Facebook has generated $210 billion in revenue. one-third of this revenue paid to creators would represent $70 billion, or $23 billion a year.
Why hasn’t Facebook paid creators before? Because it hasn’t needed to do so. Facebook’s social graph is so large that creators must post there anyway — the scale afforded by success on Facebook Blue and Instagram allows creators to monetize through directly selling to brands. Facebooks ads have value because of creators’ labor; if the users did not generate content, the social graph would not exist. Creators deserve more than the scraps they generate on their own. Facebook suppresses creators’ wages because it can. This is what monopolies do.
Facebook has long been the Standard Oil of social media, using its core monopoly to begin its march upstream and down. Zuckerberg announced in July and renewed his focus today on the metaverse, a market Roblox has pioneered. After achieving a monopoly in personal social media and competing ably in entertainment social media and virtual reality, Facebook’s drilling continues. Yes, Facebook may be free, but its monopoly harms Americans by stifling creator wages. The antitrust laws dictate that consumer harm is not a necessary condition for proving a monopoly under the Sherman Act; monopolies in and of themselves are illegal. By refiling the correct market definition and marketshare, the FTC stands more than a chance. It should win.
A prior version of this article originally appeared on Substack.
Facebook has extended the option of using end-to-end encryption for Messenger voice calls and video calls.
End-to-end encryption (E2EE) — a security feature that prevents third-parties from eavesdropping on calls and chats — has been available for text conversations on Facebook’s flagship messaging service since 2016. Although the company has faced pressure from governments to roll back its end-to-end encryption plans, Facebook is now extending this protection to both voice and video calls on Messenger, which means that “nobody else, including Facebook, can see or listen to what’s sent or said.”
“End-to-end encryption is already widely used by apps like WhatsApp to keep personal conversations safe from hackers and criminals,” Ruth Kricheli, director of product management for Messenger, said in a blog post on Friday. “It’s becoming the industry standard and works like a lock and key, where just you and the people in the chat or call have access to the conversation.”
Facebook has some other E2EE features in the works, too. It’s planning to start public tests of end-to-end encryption for group chats and calls in Messenger in the coming weeks and is also planning a limited test of E2EE for Instagram direct messages. Those involved in the trial will be able to opt-in to end-to-end encrypted messages and calls for one-on-one conversations carried out on the photo-sharing platform.
Beyond encryption, the social networking giant is also updating its expiring messages feature, which is similar to the ephemeral messages feature available on Facebook-owned WhatsApp. It’s now offering more options for people in the chat to choose the amount of time before all new messages disappear, from as few as five seconds to as long as 24 hours.
“People expect their messaging apps to be secure and private, and with these new features, we’re giving them more control over how private they want their calls and chats to be,” Kricheli added.
News of Facebook ramping up its E2EE rollout plans comes just days after the company changed its privacy settings — again.
Several users from Zambia have taken to Twitter informing the general public that WhatsApp has been restricted in the country amidst ongoing general elections today.
The president and parliamentary elections culminate in a face-off between current President Edgar Lungu and opposition Hakainde Hichilema.
Internet monitoring organization Netblocks further corroborated these reports, adding that multiple internet providers in Zambia had restricted access to the American social messaging platform. Some of these networks include Zambian government-owned Zamtel, Airtel Zambia, Liquid Telecom and MTN.
Confirmed: WhatsApp messaging app restricted in #Zambia on election day; real-time network data show loss of service on multiple internet providers as polls get under way, corroborating widespread user reports; incident ongoing #ZambiaDecides2021
— NetBlocks (@netblocks) August 12, 2021
Just this week, reports circulated that the Zambian government had threatened to shut down the internet if Zambians “failed to use the cyberspace during this year’s election correctly.” The reports say the government intended to go through with its plans from Thursday, the polling day, till Sunday, when vote counts are expected to have ended.
However, the Zambian government, via its Information and Broadcasting Services Permanent Secretary, Amos Malupenga, came out to deny the reports, calling them “malicious.” Nevertheless, he mentioned that the government would not tolerate abuse of the internet and if any mischief occurred, there would be no hesitation to take appropriate measures.
“The government, therefore, expects citizens to use the internet responsibly. But if some people choose to abuse the internet to mislead and misinform, the government will not hesitate to invoke relevant legal provisions to forestall any breakdown of law and order as the country passes through the election period,” Malupenga said.
Zambia isn’t the first African country to witness this during an election as social media restrictions and internet shutdowns are now a recurring theme for most African states.
Countries like Cameroon, Congo, Uganda, Tanzania, Guinea, Togo, Benin, Mali and Mauritania have faced social media restrictions and internet shutdowns during elections. A handful of others like Chad, Nigeria and Ethiopia, on the other hand, have experienced similar restrictions for unrelated events.
Most governments argue that they carry out social media restrictions and internet shutdowns to maintain security during elections; however, it’s glaring to see the process as a means to curb the spread of vital information among voters and the media within and outside the country.
Today’s event shows that despite denying reports about an imminent internet shutdown, the Zambian government is heading in that direction by first cutting off WhatsApp. While writing on the WhatsApp restriction, Netblocks also reported that the Zambian government has proceeded to restrict other social media platforms, including Facebook, Instagram, Messenger and Twitter.
Still, internet users in Zambia are now using VPN services to bypass the restrictions on WhatsApp and these other social media platforms. Yet, it remains to be seen if the government will enforce a full internet shutdown.
WhatsApp users will finally be able to move their entire chat history between mobile operating systems — something that’s been one of users’ biggest requests to date. The company today introduced a feature that will soon become available to users of both iOS and Android devices, allowing them to move their WhatsApp voice notes, photos, and conversations securely between devices when they switch between mobile operating systems.
The company had been rumored to be working on such functionality for some time, but the details of which devices would be initially supported or when it would be released weren’t yet known.
In product leaks, WhatsApp had appeared to be working on an integration into Android’s built-in transfer app, the Google Data Transfer Tool, which lets users move their files from one Android device to another, or switch from iOS to Android.
The feature WhatsApp introduced today, however, works with Samsung devices and Samsung’s own transfer tool, known as Smart Switch. Today, Smart Switch helps users transfer contacts, photos, music, messages, notes, calendars, and more to Samsung Galaxy devices. Now, it will transfer WhatsApp chat history, too.
WhatsApp showed off the new tool at Samsung’s Galaxy Unpacked event, and announced Samsung’s newest Galaxy foldable devices would get the feature first in the weeks to come. The feature will later roll out to Android more broadly. WhatsApp didn’t say when iOS users would gain access.
To use the feature, WhatsApp users will connect their old and new device together via a USB-C to Lightning cable, and launch Smart Switch. The new phone will then prompt you to scan a QR code using your old phone and export your WhatsApp history. To complete the transfer, you’ll sign into WhatsApp on the new device and import the messages.
Building such a feature was non-trivial, the company also explained, as messages across its service are end-to-end encrypted by default and stored on users’ devices. That meant the creation of a tool to move chat history between operating systems required additional work from both WhatsApp as well as operating system and device manufacturers in order to build it in a secure way, the company said.
“Your WhatsApp messages belong to you. That’s why they are stored on your phone by default, and not accessible in the cloud like many other messaging services,” noted Sandeep Paruchuri, product manager at WhatsApp, in a statement about the launch. “We’re excited for the first time to make it easy for people to securely transfer their WhatsApp history from one operating system to another. This has been one of our most requested features from users for years and we worked together with operating systems and device manufacturers to solve it,” he added.
The encrypted chat app Signal is adding a few new options for users looking to lock down their messages. The app will now allow anyone to turn on a default timer for disappearing messages, automatically applying the settings to any newly initiated conversations.
Signal’s disappearing messages option deletes chats for both the sender and receiver after a set amount of time passes. Previously, you had to toggle the option on and select an interval for each individual conversation, which made it easy to overlook the extra privacy feature if you had a lot of chats going at once.
Shout out to everyone who's been asking for this for a while.
Now you can set a default disappearing message timer in Signal. All new groups you create or new conversations you initiate will be preconfigured with it. https://t.co/QGWv6DTx6V
— Moxie Marlinspike (@moxie) August 10, 2021
Signal is also adding more options for how long disappearing messages stick around before evaporating. The app’s users can now select an interval up to four weeks and as short as 30 seconds. You can even lower that to a single second in the app’s custom time options.
On any chat app, it’s important to remember that disappearing messages vanish from the user interface, but that doesn’t mean they’re gone for good. Anything you share online can live on indefinitely via screenshots or through someone taking a photo of an app’s screen with another device.
Signal wants its users to keep this in mind, noting that the disappearing message options are best for saving storage space and keeping conversation history to a minimum, just in case. “This is not for situations where your contact is your adversary,” the company wrote in a blog post.
The app remains one of the most popular end-to-end encrypted messaging options to date, and earlier this year even managed to absorb some WhatsApp users who grew skittish over data-sharing policy changes at Facebook.
The privacy-minded messaging app is very well regarded for its strong feature set and the company’s independence, though Signal remains relatively small compared to Facebook’s own end-to-end encrypted WhatsApp, which the company acquired in 2014. As of December 2020, Signal boasted around 20 million monthly active users, while WhatsApp hit 2 billion users early last year.
Facebook posted its second quarter earnings Wednesday, beating expectations with $29 billion in revenue.
The world’s biggest social media company was expected to report $27.8 billion in revenue for the quarter, a 50 percent increase from the same period in 2020. Facebook reported earnings per share of $3.61, which also bested expectations. The company’s revenue was $18.6 billion in the same quarter of last year.
In the first financial period to really reflect a return to quasi-economic normalcy after a very online pandemic year, Facebook met user growth expectations. At the end of March, Facebook boasted 2.85 billion monthly active users across its network of apps. At the end of its second quarter, Facebook reported 2.9 billion monthly active users, roughly what was expected.
The company’s shares opened at $375 on Wednesday morning and were down to $360 in a dip following the earnings report.
In spite of a strong quarter, Facebook is warning of change ahead — namely impacts to its massive ad business, which generated $28.5 billion out of the company’s $29 billion this quarter. The company specifically named privacy-focused updates to Apple’s mobile operating system as a threat to its business.
“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates, which we expect to have a greater impact in the third quarter compared to the second quarter,” the company stated its investor report outlook.
On the company’s investor call, Facebook CEO Mark Zuckerberg pointed to Facebook’s plans to reduce its reliance on ad revenue, noting the company’s expanded efforts to attract and support content creators and its e-commerce plans in particular. “We want our platforms to be the best place for creators to make a living,” Zuckerberg said, adding that the company plans to monetize creator tools starting in 2023.
Zuckerberg also emphasized Facebook’s grand aspirations for social experiences in VR. “Virtual reality will be a social platform, which is why we’re so focused on building it,” Zuckerberg said.
No matter what Facebook planned to report Wednesday, the company is a financial beast. Bad press and user mistrust in the West haven’t done much to hurt its bottom line and the company’s ad business is looking as dominant as ever. Short of meaningful antitrust reform in the U.S. or a surging competitor, there’s little to stand in Facebook’s way. The former might still be a long shot given partisan gridlock in Congress, even with the White House involved, but Facebook is finally facing a threat from the latter.
For years, it’s been difficult to imagine a social media platform emerging as a proper rival to the company, given Facebook’s market dominance and nasty habit of acquiring competitors or brazenly copying their innovations, but it’s clear that TikTok is turning into just that. YouTube is huge, but the platforms matured in parallel and co-exist, offering complementary experiences.
TikTok hit 700 million monthly active users in July 2020 and surpassed three billions global downloads earlier this month, becoming the only non-Facebook owned app to do so, according to data from Sensor Tower. If the famously addictive short form video app can successfully siphon off some of the long hours that young users spend on Instagram and Facebook’s other platforms and make itself a cozy home for brands in the process, the big blue giant out of Menlo Park might finally have something to lose sleep over.
Over the weekend, an international consortium of news outlets reported that several authoritarian governments — including Mexico, Morocco, and the United Arab Emirates — used spyware developed by NSO Group to hack into the phones of thousands of their most vocal critics, including journalists, activists, politicians and business executives.
A leaked list of 50,000 phone numbers of potential surveillance targets was obtained by Paris-based journalism non-profit Forbidden Stories and Amnesty International, and shared with the reporting consortium, including the Washington Post and The Guardian. Researchers analyzed the phones of dozens of victims to confirm they were targeted by the NSO’s Pegasus spyware, which can access all of the data on a person’s phone. The reports also confirm new details of the government customers themselves, which NSO Group closely guards. Hungary, a member of the European Union where privacy from surveillance is supposed to be a fundamental right for its 500 million residents, is named as an NSO customer.
The reporting shows for the first time how many individuals are likely targets of NSO’s intrusive device-level surveillance. Previous reporting had put the number of known victims in the hundreds or over a thousand.
NSO Group sharply rejected the claims. NSO has long said that it doesn’t know who its customers target, which it reiterated in a statement to TechCrunch on Monday.
Researchers at Amnesty, whose work was reviewed by the Citizen Lab at the University of Toronto, found that NSO can deliver Pegasus by sending a victim a link which when opened infects the phone, or silently and without any interaction at all through a “zero-click” exploit, which takes advantage of vulnerabilities in the iPhone’s software. Citizen Lab researcher Bill Marczak said in a tweet that NSO’s zero-clicks worked on iOS 14.6, which until today was the most up-to-date version.
Amnesty’s researchers showed their working by publishing meticulously detailed technical notes and a toolkit that they said may help others identify if their phones have been targeted by Pegasus.
The Mobile Verification Toolkit, or MVT, works on both iPhones and Android devices, but slightly differently. Amnesty said that more forensic traces were found on iPhones than Android devices, which makes it easier to detect on iPhones. MVT will let you take an entire iPhone backup (or a full system dump if you jailbreak your phone) and feed in for any indicators of compromise (IOCs) known to be used by NSO to deliver Pegasus, such as domain names used in NSO’s infrastructure that might be sent by text message or email. If you have an encrypted iPhone backup, you can also use MVT to decrypt your backup without having to make a whole new copy.
The Terminal output from the MVT toolkit, which scans iPhone and Android backup files for indicators of compromise. (Image: TechCrunch)
The toolkit works on the command line, so it’s not a refined and polished user experience and requires some basic knowledge of how to navigate the terminal. We got it working in about ten minutes, plus the time to create a fresh backup of an iPhone, which you will want to do if you want to check up to the hour. To get the toolkit ready to scan your phone for signs of Pegasus, you’ll need to feed in Amnesty’s IOCs, which it has on its GitHub page. Any time the indicators of compromise file updates, download and use an up-to-date copy.
Once you set off the process, the toolkit scans your iPhone backup file for any evidence of compromise. The process took about a minute or two to run and spit out several files in a folder with the results of the scan. If the toolkit finds a possible compromise, it will say so in the outputted files. In our case, we got one “detection,” which turned out to be a false positive and has been removed from the IOCs after we checked with the Amnesty researchers. A new scan using the updated IOCs returned no signs of compromise.
Given it’s more difficult to detect an Android infection, MVT takes a similar but simpler approach by scanning your Android device backup for text messages with links to domains known to be used by NSO. The toolkit also lets you scan for potentially malicious applications installed on your device.
The toolkit is — as command line tools go — relatively simple to use, though the project is open source so not before long surely someone will build a user interface for it. The project’s detailed documentation will help you — as it did us.
You can send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using our SecureDrop. Learn more.
The consumer protection association umbrella group, the Beuc, said today that together with eight of its member organizations it’s filed a complaint with the European Commission and with the European network of consumer authorities.
“The complaint is first due to the persistent, recurrent and intrusive notifications pushing users to accept WhatsApp’s policy updates,” it wrote in a press release.
“The content of these notifications, their nature, timing and recurrence put an undue pressure on users and impair their freedom of choice. As such, they are a breach of the EU Directive on Unfair Commercial Practices.”
After earlier telling users that notifications about the need to accept the new policy would become persistent, interfering with their ability to use the service, WhatsApp later rowed back from its own draconian deadline.
However the app continues to bug users to accept the update — with no option not to do so (users can close the policy prompt but are unable to decline the new terms or stop the app continuing to pop-up a screen asking them to accept the update).
“In addition, the complaint highlights the opacity of the new terms and the fact that WhatsApp has failed to explain in plain and intelligible language the nature of the changes,” the Beuc went on. “It is basically impossible for consumers to get a clear understanding of what consequences WhatsApp’s changes entail for their privacy, particularly in relation to the transfer of their personal data to Facebook and other third parties. This ambiguity amounts to a breach of EU consumer law which obliges companies to use clear and transparent contract terms and commercial communications.”
The organization pointed out that WhatsApp’s policy updates remain under scrutiny by privacy regulations in Europe — which it argues is another factor that makes Facebook’s aggressive attempts to push the policy on users highly inappropriate.
And while this consumer-law focused complaint is separate to the privacy issues the Beuc also flags — which are being investigated by EU data protection authorities (DPAs) — it has called on those regulators to speed up their investigations, adding: “We urge the European network of consumer authorities and the network of data protection authorities to work in close cooperation on these issues.”
The Beuc has produced a report setting out its concerns about the WhatsApp ToS change in more detail — where it hits out at the “opacity” of the new policies, further asserting:
“WhatsApp remains very vague about the sections it has removed and the ones it has added. It is up to users to seek out this information by themselves. Ultimately, it is almost impossible for users to clearly understand what is new and what has been amended. The opacity of the new policies is in breach of Article 5 of the UCTD [Unfair Contract Terms Directive] and is also a misleading and unfair practice prohibited under Article 5 and 6 of the UCPD [Unfair Commercial Practices Directive].”
Reached for comment on the consumer complaint, a WhatsApp spokesperson told us:
“Beuc’s action is based on a misunderstanding of the purpose and effect of the update to our terms of service. Our recent update explains the options people have to message a business on WhatsApp and provides further transparency about how we collect and use data. The update does not expand our ability to share data with Facebook, and does not impact the privacy of your messages with friends or family, wherever they are in the world. We would welcome an opportunity to explain the update to Beuc and to clarify what it means for people.”
The Commission was also contacted for comment on the Beuc’s complaint — we’ll update this report if we get a response.
The complaint is just the latest pushback in Europe over the controversial terms change by Facebook-owned WhatsApp — which triggered a privacy warning from Italy back in January, followed by an urgency procedure in Germany in May when Hamburg’s DPA banned the company from processing additional WhatsApp user data.
Although, earlier this year, Facebook’s lead data regulator in the EU, Ireland’s Data Protection Commission, appeared to accept Facebook’s reassurances that the ToS changes do not affect users in the region.
German DPAs were less happy, though. And Hamburg invoked emergency powers allowed for in the General Data Protection Regulation (GDPR) in a bid to circumvent a mechanism in the regulation that (otherwise) funnels cross-border complaints and concerns via a lead regulator — typically where a data controller has their regional base (in Facebook/WhatsApp’s case that’s Ireland).
Such emergency procedures are time-limited to three months. But the European Data Protection Board (EDPB) confirmed today that its plenary meeting will discuss the Hamburg DPA’s request for it to make an urgent binding decision — which could see the Hamburg DPA’s intervention set on a more lasting footing, depending upon what the EDPB decides.
In the meanwhile, calls for Europe’s regulators to work together to better tackle the challenges posed by platform power are growing, with a number of regional competition authorities and privacy regulators actively taking steps to dial up their joint working — in a bid to ensure that expertise across distinct areas of law doesn’t stay siloed and, thereby, risk disjointed enforcement, with conflicting and contradictory outcomes for Internet users.
There seems to be a growing understanding on both sides of the Atlantic for a joined up approach to regulating platform power and ensuring powerful platforms don’t simply get let off the hook.
WhatsApp is working on a setting that will let users more easily bypass its iffy image compression and send photos and videos in the highest available fidelity. The “best quality” option will likely join “auto” and “data saver” choices in a future version of the app.
It appears users will eventually have the choice of whether to compress photos and videos to perhaps save on their data allowance, send them in the best available quality or let WhatsApp automatically select the optimal level of compression for files.
The settings are present in an update WhatsApp submitted to the Google Play Beta Program, as spotted by WABetaInfo. The options will probably arrive in the public Android build of the app, though it’s not clear when — they’re currently in development. It’s likely the additional image quality options will come to iOS as well, since WhatsApp generally maintains the same features across both platforms.
This could come as welcome news for those who don’t use the stock messaging apps on iOS or Android and often share photos and videos of their loved ones (Apple Messages retains the original image quality most of the time). Meanwhile, multi-device support is also on the way to WhatsApp.
Editor’s note: This post originally appeared on Engadget.
Facebook is making it even easier to buy stuff while you scroll past photos of your high school lab partner’s dog. Yes, Instagram Shops and Facebook Marketplace are already displayed prominently on the apps’ bottom navigation tabs. But now, you can shop on WhatsApp too, along with other updates.
Today on a Live Audio Room, CEO Mark Zuckerberg announced three e-commerce updates that are coming to Facebook products: Shops on WhatsApp and Marketplace, Shops Ads, and Instagram Visual Search.
“More than 1 billion people use Marketplace each month, so we’re making it easy for businesses to bring their Shops into Marketplace to reach even more people,” Zuckerberg wrote in a Facebook post. When customers view a shop on WhatsApp, they’ll have the option of chatting with a business before buying something.
At its F8 conference earlier this month, Facebook revealed updates to WhatsApp for Business — previously, it could take weeks to set up a business account, but now, businesses can sign up in just a few minutes. Though WhatsApp has more than 2 billion global users, only about 175 million people message with WhatsApp Business accounts daily for things like customer support. Since Facebook has been pushing e-commerce on platforms like Instagram, it makes sense that this initiative will expand to WhatsApp too.
The rollout for Shops in WhatsApp will start soon, and Shops inventory in Marketplace is available now for Shops in the US with on-site checkout.
The next feature, Shops Ads, aims to provide a more individualized shopping experience based on people’s individual shopping habits. Zuckerberg said, “We’re launching the ability for a business to send shoppers to where you’re going to be most likely to make a purchase based on your shopping behavior.” Starting now, AR Dynamic Ads are available in the United States – companies like Huda Beauty and Laura Mercier are using these ads to let customers test lipstick shades with AR before making a purchase. These AR try-on experiences are made available through API integrations with Modiface and Perfect Corp. Early this year, Pinterest collaborated with ModiFace to launch an AR eyeshadow try-on.
Image Credits: Facebook
Over on Instagram, an AI-based Visual Search feature will roll out for testing in the coming months.
“A lot of shopping discovery begins with visual discovery, right, so you see something that you think is awesome. And then, you know, maybe you want to see other products that are like that, or you want to figure out how to get that product,” Zuckerberg explained. “And this is the type of problem that AI can really help out with.”
Using this AI, people will be able to upload their own photos — even ones they haven’t posted on Instagram — to find similar items. Facebook isn’t the first company to use this technology — see Cadeera, Donde Search, or Stye.ai, for instance. But bringing this technology to major platforms might change the way we shop, which seems to be Facebook’s current goal.
Squad used to be an app that connected people with similar interests for in-person meetups. Then the coronavirus pandemic hit. While most social apps thrived under these conditions — people craved digital connection more than ever — Squad couldn’t operate.
Founder Isa Watson didn’t know how long the world would be in shutdown. Instead of waiting for a return to normalcy, she shifted the scope of the app entirely.
Today, Squad relaunches as an audio-based social app that aims to help users deepen their relationship with their existing circle of close friends. Squad is an audio-only app, but don’t worry — it’s not another Clubhouse wannabe. Instead, it functions as a news feed of voice message updates from your closest friends, which expire after 24 hours.
You can add up to 12 friends to your “squad,” and once you post an update, your squad members can emoji react or send a private voice message in response — these also expire after a day, encouraging users to be more open about what they share. Soon, Squad will support phone calls, but there currently isn’t functionality for group calls or group audio messaging. But, users might be incentivized to talk on the phone via Squad rather than a typical call, since you can add a title to your call. That way, your squad member knows why you’re calling before they pick up.
Image Credits: Squad
“There’s a big gap in the social landscape, because most of the tools are discovery platforms, broadcast platforms and personal branding platforms,” Watson said. “There’s a huge opportunity for us to come in and help people maintain stronger connections with the people that they enjoy the most.”
Posting a voice update feels more genuine than a curated Instagram shot or a crafted Facebook status update (and Facebook is decidedly uncool among Gen Z and millennials). As the popularity of apps like Dispo show, young people are responding well to ephemeral, authentic social media experiences. But the audio-only medium could be a hard sell for people who aren’t already sending voice messages on WhatsApp or iMessage. However, while Squad’s initial rollout will be domestic, there’s great potential for an app like this outside of the U.S., where voice messaging is more popular.
“A lot of the conversations that would happen on text message are now happening in an asynchronous audio type of way,” Watson added. “So we expect that to continue to penetrate further into our habits.”
Watson raised a $3.5 million seed round in 2019, and she was featured on TechCrunch with advice on raising venture capital as a woman of color in Silicon Valley. Despite changing the direction of her app, her investors — which include Michael Dearing (Harrison Metal), Aaron Levie (Box), Katrina Lake (Stich Fix), Jen Rubio (Away) and Stewart Butterfield (Slack) — remain supportive. Watson secured another million dollars of funding after the seed round, bringing Squad’s funding to a total of $4.5 million to date.
“One thing [the investors] said to me was, ‘Isa, you’ve been talking about this shift in social for years now, and people told you you were crazy, that social was all figured out and there was nothing that was going to happen,’ ” Watson said. “Now, people are buying into that change.”
Image Credits: Squad
Even though Squad isn’t a Clubhouse competitor, the rise of audio-only media is a good sign for the app’s ability to crack a saturated social market (so many social apps are trying to compete with Clubhouse, it’s a miracle we don’t yet have audio-only Tinder speed dating). In Squad’s beta test, 87.5% of users completed the onboarding process. Still, Squad falls victim to the same accessibility issues that plague Clubhouse and many of its clones. As of yet, Squad doesn’t support captioning, though Watson says this is something the company has discussed and hopes to implement down the road. Not only could captioning broaden Squad’s audience, but it could also further differentiate the app from messaging giants like iMessage and WhatsApp.
Still, if you’re someone who loves to send voice messages in your group chats, you might want to get your friends on Squad. Currently, the app is invite-only with a waitlist. Once you’re off the waitlist, you get three invites. If you post for five days straight, you get three more invites, and if someone you invited signs up, you get two more invites as well. This continues until you round out your 12-member squad.
Privacy tech continues cooking on gas. To wit: Non-tracking search engine DuckDuckGo has just revealed that it beefed up its balance sheet at the back end of last year with $100 million+ in “mainly secondary investment” — from a mix of existing and new investors.
Its blog post name-checks Omers Ventures, Thrive, GP Bullhound, Impact America Fund, and also WhatsApp founder Brian Acton; inventor of the world wide web Tim Berners-Lee; VC and diversity activist Freada Kapor Klein; and entrepreneur Mitch Kapor as being among the participating investors. So quite the line up.
DuckDuckGo said the secondary investment allowed some of its early employees and investors to cash out a chunk of their equity while bolstering its financial position.
Although it also says its business — which has been profitable since 2014 — is “thriving”, reporting that revenues are now running at $100M+ a year. Hence it not needing to keep dipping into an external investor pot.
Its last VC raise was in 2018 when it took in $10M after being actively pursued by Omers Ventures — who convinced it to take the money to help support growth objectives (especially internationally).
DDG has a few other metrics to throw around now: Over the last 12 months it said its apps were downloaded over 50M times — more than in all prior years combined.
It’s also revealed that its monthly search traffic increased 55% and says marketshare trackers indicate that it grabbed the #2 spot for search engine on mobile in a number of countries, including the U.S., Canada, Australia, and the Netherlands. (StatCounter/Wikipedia).
“We don’t track our users so we can’t say for sure how many we have, but based on market share estimates, download numbers, and national surveys, we believe there are between 70-100 million DuckDuckGo users,” it added.
A looming shift to Google’s Android choice screen in Europe, where regulators have forced the company to present users of mobile devices that run its OS with rival options when they’re setting a default search engine, looks likely to further boost DuckDuckGo’s regional fortunes.
Google will be ditching the current paid auction model — so rivals which have a valuable alternative proposition for users (like privacy) combined with strong brand awareness (and, well, everyone likes ducks… ) have the best chance yet to take slices out of Google’s marketshare.
DuckDuckGo’s blog post confirms it’ll be dialling up its marketing in Europe and other regions.
“Our thriving business also gives us the resources to tell more people there is a simple solution for online privacy they can use right now. Over the last month, we’ve rolled out billboard, radio, and TV ads in 175 metro areas across the U.S., with additional efforts planned for Europe and other countries around the world,” it notes.
So it look like a good chunk of DDG’s secondary funding will be spent on growth marketing — as it seeks to capitalize on rising public attention to online privacy, tracking and creepy ads, itself fuelled by years of data scandals.
Awareness is also now being actively driven by Apple’s recent switch to inform iOS users of third party app tracking and give people a simple way to say no — which includes slick, Cupertino-funded ad campaigns (such as the one below) which are clearly intended to turn and engage mainstream heads…
It’s fair to say it’s probably never been easier to craft a simple and compelling marketing message around privacy — and that’s also a testament to how far privacy tech has come in terms of usability and accessibility.
So, yes, DuckDuckGo’s business sure looks like it’s sitting pretty at this juncture of the web’s evolution. And its blog post talks about “becoming a household name for simple privacy protection”. So the scale of its ambition is clear.
“Privacy skeptics have dominated the discussion about online privacy for too long. “Sure people care about privacy, but they’ll never do anything about it.” It’s time to lay this bad take to rest,” it adds.
More products are also on the slate from the 13-year veteran privacy player.
It already bolted on tracker-blocking back in 2018 but is looking to go further — saying that it will be rolling out additional privacy features to what it bills as its “all-in-one privacy bundle”, including an email protection tool that will be launched in beta “in a few weeks” and which it says will “give users more privacy without having to get a new inbox”.
“Later this summer, app tracker blocking will be available in beta for Android devices, allowing users to block app trackers and providing more transparency on what’s happening behind the scenes on their device. And Before the end of the year, we also plan to release a brand-new desktop version of our existing mobile app which people can use as a primary browser,” it goes on, adding: “By continuing to expand our simple and seamless privacy bundle, we continue to make our product vision, ‘Privacy, simplified.’ a reality.”
That’s another trend we’re seeing in privacy tech: Innovators who have carefully and credibly built up a solid reputation around one type of tech tool (such as search or email) find themselves — as usage grows — perfectly positioned to branch out into offering a whole bundle or suite of apps they can wrap in the same protective promise.
Another player, ProtonMail, for example, has morphed into Proton, a privacy-centric company which offers freemium tools for not just end-to-end encrypted email but also cloud storage, calendar and a VPN — all neatly positioned under its pro-privacy umbrella.
Expect more development momentum as privacy tech continues to accelerate into the mainstream.