How a wily Californian beat Google and Facebook’s influence operationAugust 15, 2018
Amid a national reckoning over the perils of social media, a looming question has been whether — and how — the US government might respond. A series of hearings in Congress raised the specter of onerous new rules without ever quite convincing anyone that regulation was imminent. Amid deep partisan disagreements, the worst that Facebook, Google, and Twitter have had to contend with some sharply worded questions.
But all the way across the country, a different story was playing out. A single wealthy man, suddenly radicalized on the subject of data privacy, began consulting with experts in the hopes of crafting strong, state-level privacy protections. His name is Alistair Mactaggart, and he succeeded. Here’s how my colleague Colin Lecher described California’s new data privacy law at the time:
The California Consumer Privacy Act of 2018 is set to dramatically change how businesses handle data in the most populous state. Companies that store large amounts of personal information — including major players like Google and Facebook — will be required to disclose the types of data they collect, as well as allow consumers to opt out of having their data sold.
The legislation was a very-slightly-watered-down version of an initiative that Mactaggart planned to place on the ballot. Despite relatively little financing, the initiative received more than twice the required signatures and was polling favorably at the time the California legislature intervened.
Now, from Nicholas Confessore in The New York Times, we have the unlikely story of how the privacy act came about. It’s a very long read, well worth your time, that tells at least two stories. The first is about how Google and Facebook rose came to spend more on lobbyists than any other companies, developing deep ties to elected officials in both major parties, effectively insulating themselves from any regulation that would check their growth or revenue potential.
Facebook, a decade younger than Google, built its political apparatus twice as fast, as if observing a kind of Moore’s Law of influence-peddling. When it went public in 2012, the company had 900 million users — less than half its current size — and earned a relatively modest profit of $53 million. Over the next several years, Facebook simultaneously became one of the world’s biggest collectors of personal data and a powerful presence in Washington and beyond. It acquired Instagram, a rival social media platform, and the messaging service WhatsApp, bringing Facebook access to billions of photos and other user data, much of it from smartphones; formed partnerships with country’s leading third-party data brokers, such as Acxiom, to ingest huge quantities of commercial data; and began tracking what its users did on other websites. Smart exploitation of all that data allowed Facebook to target advertising better than almost anyone, and by 2015, the company was earning $4 billion a year from mobile advertising. Starting in 2011, Facebook doubled the amount of money it spent on lobbying in Washington, then doubled it again. The company employed just 10 lobbyists in state capitals around the country in 2012, according to my analysis of data collected by the National Institute on Money in Politics. By the time Mactaggart and Arney began work on their privacy initiative, it had 67. The tech industry was particularly powerful in California, its home base, where it doled out millions in campaign contributions to state candidates and parties.
But until recently, companies like Facebook and Google also had something that Wall Street and Big Oil and the cable companies didn’t. To many people in Washington, they were the good guys. Through the Obama years, the tech industry enjoyed extraordinary cachet in Washington, not only among Republicans but also among Democrats. Partnering with Silicon Valley allowed Democrats to position themselves as pro-business and forward-thinking. The tech industry was both an American economic success story and a political ally to Democrats on issues like immigration. Google enjoyed particularly close ties to the Obama administration: Dozens of Google alumni would serve in the White House or elsewhere in the administration, and by one estimate Google representatives visited the White House an average of about once a week. But the Obama world had relationships with other firms too. Facebook’s chief operating officer, Sheryl Sandberg, served on a high-level Obama advisory council on jobs and held a fund-raiser for Obama’s re-election campaign at her home in Atherton, Calif. The founders of Twitter, LinkedIn and the app developer Zynga together contributed more than $2 million to a pro-Obama super PAC.
It also tells the story of how Mactaggart used California’s initiative process to make an end run around their influence. Facebook and Google had teamed up to defeat an Obama-era privacy initiative, Confessore reports. Mactaggart benefited from increased skepticism about tech companies broadly, but he also got an unexpected gift this spring: the Cambridge Analytica data privacy scandal.
The Cambridge Analytica scandal engulfed Facebook, sending the company’s stock price plunging and setting in motion the worst crisis in the company’s history. Cambridge executives had long bragged about deploying powerful “psychographic” voter profiles to manipulate voters. Now Facebook was forced to acknowledge that Cambridge had used voters’ own Facebook data to do it. The damage was not only legal and political — Facebook faced lawsuits and new inquiries by regulators in Brussels, London and Washington — but also reputational. Silicon Valley’s public image had survived the Snowden revelations. But tech companies, already implicated in the spread of “fake news” and Russian interference in the 2016 election, were no longer the good guys. When Arney took one of his sons canvassing on the train, it was suddenly easy to get people to sign their ballot petition. “After the Cambridge Analytica scandal, all we had to say was ‘data privacy,’ ” he told me.
Before Cambridge Analytica, Facebook was a top donor to something called the Committee to Protect California Jobs, which tech company lobbyists had established to kill Mactaggart’s initiative. After Cambridge Analytica, Facebook announced it would no longer donate to the effort. And when it became clear that compromise legislation was the only thing to stop the initiative from going to the ballot, Facebook endorsed it.
It’s a twisty tale, artfully told. It’s also a heartening account of a time our democracy more or less worked — and could offer a roadmap for other states (or activists) looking to craft privacy regulations of their own. California’s privacy bill has its critics — Mike Masnick of TechDirt calls it “an unmitigated disaster.” But it’s also an account of how an outsider used the system, fairly, to overcome the influence peddling operation of the two best-funded players in the game.
Facebook is the company most mentioned by Congress over the past decade, with Google a distant second, Sara Fischer reports.
Here’s a great story from Brandy Zadrozny and Ben Collins, who tracked down the three people who banded together last November to promote the Qanon conspiracy theory, profiting all the way. Among other things, this story offers a great illustration of how idiotic conspiracies make the leap from one platform to another, and how conspiracy theorists ultimately turn on their own:
In November 2017, a small-time YouTube video creator and two moderators of the 4chan website, one of the most extreme message boards on the internet, banded together and plucked out of obscurity an anonymous and cryptic post from the many conspiracy theories that populated the website’s message board.
Over the next several months, they would create videos, a Reddit community, a business and an entire mythology based off the 4chan posts of “Q,” the pseudonym of a person claiming to be a high-ranking military officer. The theory they espoused would become Qanon, and it would eventually make its way from those message boards to national media stories and the rallies of President Donald Trump.
In January the New York Times exposed “fake follower factory” Devumi, which was among the more successful businesses selling Twitter followers online. Now Michael H. Keller finds Devumi and other businesses selling fake YouTube views — a trivial-sounding problem that undermines our reality in various ways. There could be tens of millions of fake views a day, Keller says.
Still, the challenges are significant. At one point in 2013, YouTube had as much traffic from bots masquerading as people as it did from real human visitors, according to the company. Some employees feared this would cause the fraud detection system to flip, classifying fake traffic as real and vice versa — a prospect engineers called “the Inversion.”
“The problem itself was extraordinary,” said Blake Livingston, a member of YouTube’s fraud and abuse team at the time who has since left the company.
Organizers of a successful fight against vaccines in Italy have used Facebook effectively to recruit supporters, Eileen Drage O’Reilly reports:
A Facebook spokesperson tells Axios that the company’s position in general is that removing provocative matter does not help build factual awareness or in different approaches to health.
WordPress parent Automattic is standing by Alex Jones amid an effort by the parent of a Sandy Hook shooting victim to remove his conspiracy posts:
Automattic has repeatedly responded to Mr. Pozner with form letters saying “because we believe this to be fair use of the material, we will not be removing it at this time.” The letters explain that fair use could include “criticism, comment, news reporting, teaching, scholarship, and research.” They also warn that the company could collect damages from people who “knowingly materially misrepresent” copyrights.
“The responses from their support people are very automated, very generic, very cold and there’s just no getting through to them,” Mr. Pozner said.
Jones is also apparently still welcome on the famously permissive Tumblr platform.
And speaking of permissive, Jones was on Periscope today telling his followers to get their “battle rifles” ready, which to my ears sure sounds like an incitement to violence against the Twitter rules.
Citizen Lab, an interdisciplinary laboratory at the University of Toronto, published a new analysis of how WeChat censors images to comply with Chinese government guidelines:
Findings show that WeChat uses two different algorithms to filter images: an Optical Character Recognition (OCR)-based approach that filters images containing sensitive text and a visual-based one that filters images that are visually similar to those on an image blacklist.
Speaking of WeChat: China is pressuring its ethnic Uighur minority to help it build a global database of expatriates, and monitoring their conversations on the chat app to make sure they comply.
Sean Rad is leading a charge to swipe $2 billion from Tinder’s corporate parent.
Here’s another sports deal from Facebook:
The company has signed an exclusive agreement to show La Liga games featuring Barcelona’s Lionel Messi and other stars for the next three years. The deal will allow Facebook to show all 380 matches for the new season, which starts on Friday, to users in India, Afghanistan, Bangladesh, Bhutan, Nepal, the Maldives, Sri Lanka and Pakistan.
YouTube is paying top creators to promote new paid memberships and chat features, Lucas Shaw reports. Some are getting hundreds of thousands of dollars.
YouTube introduced paid memberships, paid chats and a new merchandising program earlier this year to placate top talent and keep up with major competitors. Many people with large followings on the video site have complained that it doesn’t offer ways to make money beyond advertising, and that YouTube’s efforts to shield advertisers from controversial content has hurt their sales.
Five years after they started, about 3,000 guards at Facebook, Google, and other tech companies have a union contract, Melanie Ehrenkranz reports.
HQ Trivia makes more sense as a TV app than most games, though it’s not clear to me that this will drive a new round of growth for the company in the same way that (say) a new hit game would.
Do you want to ask your friends if you look cute but are afraid to ask on a public story? Now you may do so via private message.
TechDen is a $119 box and maybe the first Kickstarter gadget to emerge from the Time Well Spent movement. The way it works is, you tell it how much you want you or your kids to use your phones, and the phones stay locked in the box until a time of your choosing. Looking at the TechDen I feel an enormous urge to attack it with a baseball bat.
Andy Kessler tells Sen. Mark Warner to take his ideas for regulating Facebook and shove them. I found this rather hilariously overblown:
Good luck getting through Mr. Warner’s 23-page report. It’s filled with impossible-to-implement mandates (identify bots), silly bromides (addressing the safety and security of at-risk individuals), and dangerous power grabs (updating Section 230 of the Communications Decency Act). If even a handful of these proposals become law, faceless bureaucrats would control the internet instead of energetic entrepreneurs. No one would win under this new internet. And compliance costs would be so massive that no new startups would emerge.
Mike Masnick hates recently adopted privacy regulations around the world, including the California law mentioned in today’s lead item. Better regulation would focus on transparency and control, he says. (Counterpoint: Facebook has offered users transparency and control around their data for years, and Cambridge Analytica happened anyway. Most people just didn’t realize what they were doing when they gave away their friends’ data.)
There are better ways of dealing with all of this, starting with recognizing the idea that privacy is a trade-off. If that’s the case, there should be two key concepts for any competent approach to privacy: transparency and user control. As discussed above, many of the problems today (and nearly all of the concerns) are over the lack of transparency. This impacts both the cost and the benefit sides of the equation. If we don’t understand what data is being collected or what it’s being used for (or how it’s being stored), along with what actual benefits we’re getting, it’s much, much more difficult to make an informed decision about whether or not the trade-off is worth it. And the issue of control is connected to that, in that the more control end users have over their own data, the more they’re able to make informed choices in weighing the costs and benefits.
Ben Thompson examines fears that stories advertising won’t monetize as well as News Feed advertising. Those fears are valid in the short term and maybe over the long term as well, he says. But the format is good for brand advertising, and the biggest 200 advertisers are brand advertisers. So it seems highly possible that Facebook’s advertising mix will simply shift from direct-response to brand ads over time, generating more than enough revenue to keep the lights on in Menlo Park.
Optimizing for search creates a better internet than optimizing for social networks, argues Brian Feldman:
SEO content, on the other hand, dispenses with the emotional in favor of the mechanical. It can be stilted and awkward — but it’s more honest and transparent. When a writer pads their article for the trailer of the newest Marvel movie with search keywords — data like the cast and crew and opening date — they’re optimizing for the Google robots. But they’re also providing genuinely useful information. Social content was about manipulating people into clicking, sharing, and posting. SEO is about manipulating robots into treating your content as the best example of sought-after information.
Jeremy Gordon says it’s time to go back to Tumbr, which I would be fine with, because Tumblr at its peak was probably the best blogging community I was ever a part of. (2016-present Facebook beat tech reporting is a close second, though.) But that’s the main thing, at least to me: Tumblr was better at community building than Twitter is, and better for blogging than Facebook ever was.
On Tumblr, people could go on for at long as they needed to, a valuable tool for posters who could actually justify it. (And I use the past tense here in the context of my own experience; if you’re still doing this, bless you and yours.) Posts could be as short as necessary, but you could also find a historical deep dive, an interesting think piece (and not the kind derisively referred to as “takes”), a photo essay, or simply just a nice blog about someone’s life. The whole impetus behind following people on social media is, “Hey, I like this person’s brain, and am open to spending more time with it.” Tumblrs delivered the full, unrestrained range of someone’s head — funny, serious, and everything else.
Wednesday is the season finale of Converge, and in this episode I chat with Intercom’s Eoghan McCabe. Among other things, we talk about why he’s still bullish on bots — but not on Facebook or WhatsApp. Check it out anywhere you find podcasts, including Apple Podcasts, Google Podcasts, Pocket Casts, Stitcher, Overcast, Spotify, our RSS feed, and wherever fine podcasts are sold.
And finally …
Maxwell Tani gets his hands on the book proposal from Seth Abramson, who has gained a measure of fame with voluminous Twitter threads promising the Resistance that we are rapidly nearing the end of the Trump administration. Abramson’s self-regard is somewhat legendary, and so I found it hugely entertaining to read his proposal, which is to print out his Twitter threads in book form:
“A book of this sort is daring,” he writes. “Few if any have leveraged the advantage that books offer in collating, organizing, and amplifying in narrative form an intensely followed Twitter feed.”
Daring is one word for it, though I’d probably use another.
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