THE RISE OF FACEBOOK AND ‘THE OPERATING SYSTEM OF OUR LIVES’

Siva Vaidhyanathan, UVA’s Robertson Professor of Media Studies, is the director of the University of Virginia’s Center for Media and Citizenship.Siva Vaidhyanathan, UVA’s Robertson Professor of Media Studies, is the director of the University of Virginia’s Center for Media and Citizenship. (Photo by Dan Addison)

Recent changes announced by social media giant Facebook have roiled the media community and raised questions about privacy. The company’s updates include a higher level of news feed priority for posts made by friends and family and testing for new end-to-end encryption software inside its messenger service.

As Facebook now boasts more than a billion users worldwide, both of these updates are likely to impact the way the world communicates. Prior to the company’s news-feed algorithm change, a 2016 study from the Pew Research Center found that approximately 44 percent of American adults regularly read news content through Facebook.

UVA Today sat down with Siva Vaidhyanathan, the director of the University of Virginia’s Center for Media and Citizenship and Robertson Professor of Media Studies, to discuss the impact of these changes and the evolving role of Facebook in the world. Naturally, the conversation first aired on Facebook Live.

Excerpts from the conversation and the full video are available below.

Q. What is the change to Facebook’s News Feed?

A. Facebook has announced a different emphasis within its news feed. Now of course, your news feed is much more than news. It’s all of those links and photos and videos that your friends are posting and all of the sites that you’re following. So that could be an interesting combination of your cousin, your coworker, the New York Times and Fox News all streaming through.

A couple of years ago, the folks that run Facebook recognized that Facebook was quickly becoming the leading news source for many millions of Americans, and considering that they have 1.6 billion users around the world, and it’s growing fast, there was a real concern that Facebook should take that responsibility seriously. So one of the things that Facebook did was cut a deal with a number of publishers to be able to load up their content directly from Facebook servers, rather than just link to an original content server. That provided more dependable loading, especially of video, but also faster loading, especially through mobile.

But in recent weeks, Facebook has sort of rolled back on that. They haven’t removed the partnership program that serves up all that content in a quick form, but they’ve made it very clear that their algorithms that generate your news feed will be weighted much more heavily to what your friends are linking to, liking and commenting on, and what you’ve told Facebook over the years you’re interested in.

This has a couple of ramifications. One, it sort of downgrades the project of bringing legitimate news into the forefront by default, but it also makes sure that we are more likely to be rewarded with materials that we’ve already expressed an interest in. We’re much more likely to see material from publications and our friends we reward with links and likes. We’re much more likely to see material linked by friends with whom we have had comment conversations.

This can generate something that we call a “filter bubble.” A gentlemen named Eli Pariser wrote a book called “The Filter Bubble.” It came out in 2011, and the problem he identified has only gotten worse since it came out. Facebook is a prime example of that because Facebook is in the business of giving you reasons to feel good about being on Facebook. Facebook’s incentives are designed to keep you engaged.

Q. How will this change the experience for publishers?

A. The change or the announcement of the change came about because a number of former Facebook employees told stories about how Facebook had guided their decisions to privilege certain things in news feeds that seemed to diminish the content and arguments of conservative media.

Well, Facebook didn’t want that reputation, obviously. Facebook would rather not be mixed up or labeled as a champion of liberal causes over conservative causes in the U.S. That means that Facebook is still going to privilege certain producers of media – those producers of media that have signed contracts with Facebook. The Guardian is one, the New York Times is another. There are dozens of others. Those are still going to be privileged in Facebook’s algorithm, and among the news sources you encounter, you’re more likely to see those news sources than those that have not engaged in a explicit contract with Facebook. So Facebook is making editorial decisions based on their self-interest more than anything, and not necessarily on any sort of political ideology.

Q. You wrote “The Googlization of Everything” in 2011. Since then, have we progressed to the “Facebookization” of everything?

A. I wouldn’t say that it’s the Facebookization of everything – and that’s pretty clumsy anyway. I would make an argument that if you look at five companies that don’t even seem to do the same thing – Google, Facebook, Microsoft, Apple and Amazon – they’re actually competing in a long game, and it has nothing to do with social media. It has nothing to do with your phone, nothing to do with your computer and nothing to do with the Internet as we know it.

They’re all competing to earn our trust and manage the data flows that they think will soon run through every aspect of our lives – through our watches, through our eyeglasses, through our cars, through our refrigerators, our toasters and our thermostats. So you see companies – all five of these companies from Amazon to Google to Microsoft to Facebook to Apple – are all putting out products and services meant to establish ubiquitous data connections, whether it’s the Apple Watch or the Google self-driving car or whether it’s that weird obelisk that Amazon’s selling us [the Echo] that you can talk to or use to play music and things. These are all part of what I call the “operating system of our lives.”

Facebook is interesting because it’s part of that race. Facebook, like those other companies, is trying to be the company that ultimately manages our lives, in every possible way.

We often hear a phrase called the “Internet of things.” I think that’s a misnomer because what we’re talking about, first of all, is not like the Internet at all. It’s going to be a closed system, not an open system. Secondly, it’s not about things. It’s actually about our bodies. The reason that watches and glasses and cars are important is that they lie on and carry human bodies. What we’re really seeing is the full embeddedness of human bodies and human motion in these data streams and the full connectivity of these data streams to the human body.

So the fact that Facebook is constantly tracking your location, is constantly encouraging you to be in conversation with your friends through it – at every bus stop and subway stop, at every traffic light, even though you’re not supposed to – is a sign that they are doing their best to plug you in constantly. That phenomenon, and it’s not just about Facebook alone, is something that’s really interesting.

Q. What are the implications of that for society?

A. The implications of the emergence of an operating system of our lives are pretty severe. First of all, consider that we will consistently be outsourcing decision-making like “Turn left or turn right?,” “What kind of orange juice to buy?” and “What kind of washing detergent to buy?” All of these decisions will be guided by, if not determined by, contracts that these data companies will be signing with consumer companies.

… We’re accepting short-term convenience, a rather trivial reward, and deferring long-term harms. Those harms include a loss of autonomy, a loss of privacy and perhaps even a loss of dignity at some point. … Right now, what I am concerned about is the notion that we’re all plugging into these data streams and deciding to allow other companies to manage our decisions. We’re letting Facebook manage what we get to see and which friends we get to interact with.

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Facebook, Google and the Tech Companies Bankrolling Hate at the RNC

ECONOMY
Trump has threatened to shut down the open internet. Why aren’t companies divesting from him?

Photo Credit: Khalil Bendib / OtherWords

It’s common for major corporations to sponsor political conventions to buy favor with political parties. But what about when the convention nominates a presidential candidate who’s an out-and-out racist?

That’s a deal breaker, right?

For some big tech companies, apparently not.

Facebook recently announced that it will provide funding and other support for the Donald Trump-led Republican National Convention. And Google will be the event’s official livestream provider via YouTube.

These companies need to find their moral compass and divest from hate.

“Trumped into a Corner,” an OtherWords cartoon by Khalil Bendib

Trump’s violent rhetoric has inflamed a national atmosphere that’s already hostile toward Latino, Muslim, and black communities, as well as women and people with disabilities. He’s called for the mass deportation of undocumented immigrants, promised to build a wall on the U.S.-Mexico border, and vowed to ban all Muslims from entering the United States.

Trump has also incited actual physical violence against people of color, and refused to denounce the white supremacist organizations that openly support him.

If that weren’t enough, Trump’s also threatened to shut down the open internet, censoring the dissident voices standing up against his hate and racism. He’s called for greater surveillance of communities of color, and has encouraged violence against protesters and journalists.

In short, Trump’s campaign isn’t “business as usual”—and corporations shouldn’t treat it as such. That’s why the racial justice group ColorOfChange has launched a campaign called Divest from Hate.

They’re urging major tech companies not to bankroll a platform for hate while Trump continues to incite violence against marginalized communities. Other groups, including my own, have joined the effort to push tech companies to pull their support from the Republican convention, including both direct financial donations and in-kind contributions.

This isn’t about left or right, but right and wrong. People of color make up a large portion of the users of services like YouTube and Facebook. These companies are essentially profiting off the very communities that Trump’s rallying against.

Erin Egan, a Facebook vice president for publicity, claims that the company’s involvement in the convention will “facilitate an open dialogue among voters, candidates, and elected officials.” But throwing a coronation ball for Trump and his white supremacist supporters has nothing to do with democracy.

It’s important to note that these companies have taken stands on other political issues.

Both Google and Facebook recently spoke out against North Carolina’s transphobic “bathroom bill.” And earlier this year, Facebook CEO Mark Zuckerberg circulated an internal memo calling out employees who crossed out the words “Black Lives Matter” on the signature wall at the company’s headquarters. He called the behavior “malicious” and “unacceptable.”

Now it’s time for Facebook and Google to take another stand against hate—and to join companies like Coca-Cola, Hewlett-Packard, and Microsoft that have already scaled back or cut their support to the Republican convention.

Lucia Martínez is an organizer with the Free Press Action Fund, a nonpartisan organization that doesn’t support or oppose any candidates for public office.

http://www.alternet.org/economy/facebook-google-tech-funding-trump-rnc?akid=14341.265072.CtYp-J&rd=1&src=newsletter1058139&t=24

Stephen Fry signs off from ‘The Grid’ again

Wed 20 Apr 2016 2.47pm

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Following a scathing departure from his four million Twitter followers regarding criticism of his BAFTA commentary in February, unelected UK and internet technology ambassador Stephen Fry has made an avowed departure from all social networks.

In a stinging 2,600+ word essay at stephenfry.com, the 58-year-old comedian, presenter and raconteur compares an exit from mainstream social network channels such as YouTube, Twitter and Facebook to the heroic plight of the heroes of 1970s dystopian sci-fi movies such as Logan’s Run and Soylent Green; thereby comparing the pre-eminence of social media with those highly-telescoped visions of ruthless government authorities.

Likewise Fry regards flight from the social networks in the same light as ‘unplugging’ from the enemy artificial reality offered to a ‘sleeping’ populace in The Matrix:

‘Jacking out of the matrix would cast one as a hero of the kind of dystopian film that proved popular in the 70s, Logan’s Run, Zardoz, Soylent Green, Fahrenheit 451 … on the run from The Corporation, with the foot soldiers of The System hard on your heels. We really are starting to live in that kind of movie, mutatis mutandis, so surely it’s time to join the Rebels, the Outliers, the Others who live beyond the Wall and read forbidden books, sing forbidden songs and think forbidden thoughts in defiance of The One.’

The tech evangelist, first baptised into his ministry by early association with Apple’s products, turns his powers of persuasion 180 degrees in the piece, in a plea for ‘Generation Z’ to rebel against the matrix:

‘Who most wants you to stay on the grid? The advertisers. Your boss. Human Resources. The advertisers. Your parents (irony of ironies – once they distrusted it, now they need to tag you electronically, share your Facebook photos and message you to death). The advertisers. The government. Your local authority. Your school. Advertisers..
Well, if you’re young and have an ounce of pride, doesn’t that list say it all? So fuck you, I’m Going Off The Grid.

The essay grounds its argument in the current millennial fad for ‘retro’ and ‘legacy’ – abstract, unlived ideas for young people captivated by the spirit of nostalgia for the fax age – but Fry, part of the ‘blank generation’ that emerged after the conformity of the 1950s and before the conformity of the yuppie age, ascribes genuine merit to the pre-digital society, and fond regard for the early days of the internet and the computer revolution:

‘The digital Wild West may have been rough and lawless but folk were politer to strangers and knew their manners better than the ruthless, ambitious citizens who took over. The pioneer territory has now had its shitty streets and crooked boardwalks paved over. In place of saloons there are strip malls, fun fairs and multiplexes. The telegraph and train killed the stage coach and the pony express.’

The highly discursive piece provides a fairly comprehensive history of the internet, and an array of historical examples demonstrating Fry’s contention that the current social media giants will fall as mightily as they have risen in the last ten years:

‘And Facebook will be dust one day. Hard to imagine perhaps but obviously and happily true… For now, Facebook is of course all powerful and finds itself busy eating the internet (thereby preparing its own extinction) and of course parents are on it. That’s how crap it is.’

‘Off the Grid’ is a refreshing note of rebellion because of who wrote it, though that’s somewhat counterbalanced by Stephen Fry’s epic history of departure, and not just from the virtual world. His last major retirement from Twitter was in 2009, following a row with another Twitter user. Fry suffers, now quite publicly, from bipolar disorder.

So he may be back – it wouldn’t be the first time. But his current spirit of rebellion is worthy of celebration:

‘I live in a world without Facebook, and now without Twitter. I manage to survive too without Kiki, Snapchat, Viber, Telegram, Signal and the rest of them. I haven’t yet learned to cope without iMessage and SMS. I haven’t yet turned my back on email and the Cloud. I haven’t yet jacked out of the matrix and gone off the grid. Maybe I will pluck up the courage.’

 

https://thestack.com/world/2016/04/20/stephen-fry-signs-off-from-the-grid-again/

You may hate Donald Trump. But do you want Facebook to rig the election against him?

 
Mark Zuckerberg
‘The dominance of Facebook in Americans’ daily lives, and the fact that more people get their news from it than any other source, means the influence of the company in elections has never been greater.’ Photograph: Stephen Lam/Reuters

You may hate Donald Trump. But do you want Facebook to rig the election against him?  Facebook could use its unprecedented powers to tilt the 2016 presidential election away from him – and the social network’s employees have apparently openly discussed whether they should do so.

As Gizmodo reported on Friday, “Last month, some Facebook employees used a company poll to ask [Facebook founder Mark] Zuckerberg whether the company should try ‘to help prevent President Trump in 2017’.”

Facebook employees are probably just expressing the fear that millions of Americans have of the Republican demagogue. But while there’s no evidence that the company plans on taking anti-Trump action, the extraordinary ability that the social network has to manipulate millions of people with just a tweak to its algorithm is a serious cause for concern.

The fact that an internet giant like Facebook or Google could turn an election based on hidden changes to its code has been a hypothetical scenario for years (and it’s even a plot point in this season’s House of Cards). Harvard Law professor Jonathan Zittrain explained in 2010 how “Facebook could decide an election without anyone ever finding out”, after the tech giant secretly conducted a test in which they were able to allegedly increase voter turnout by 340,000 votes around the country on election day simply by showing users a photo of someone they knew saying “I voted”.

Facebook repeated this civics engagement experiment on a broader scale during the 2012 election. While the testing did not favor any one candidate, the potential for that power to be used to manipulate voters became such an obvious concern that Facebook’s COO, Sheryl Sandberg, said, in 2014, “I want to be clear – Facebook can’t control emotions and cannot and will not try to control emotions.” She added: “Facebook would never try to control elections.”

Her comments came right after a controversial study conducted by Facebook became public. It showed that, in fact, the company had secretly manipulated the emotions of nearly 700,000 people.

Some 78% of Americans have a social network profile of some kind. The dominance of Facebook in Americans’ daily lives, and the fact that more people get their news from it than any other source, means the influence of the company in elections has never been greater. With each year that passes, the potential that an internet giant could swing an election gets greater.

Earlier this year, the Guardian reported on the treasure trove of data Facebook holds on hundreds of millions of voters and how it is already allowing presidential candidates to exploit it in different ways:

Facebook, which told investors on Wednesday it was ‘excited about the targeting’, does not let candidates track individual users. But it does now allow presidential campaigns to upload their massive email lists and voter files – which contain political habits, real names, home addresses and phone numbers – to the company’s advertising network. The company will then match real-life voters with their Facebook accounts, which follow individuals as they move across congressional districts and are filled with insightful data.

And in a Politico Magazine piece entitled “How Google could rig the 2016 election”, research psychologist Robert Epstein described how a study he co-authored in Proceedings of the National Academy of Sciences found that “Google’s search algorithm can easily shift the voting preferences of undecided voters by 20% or more – up to 80% in some demographic groups – with virtually no one knowing they are being manipulated.”

As Epstein says, much of this manipulation is unintentional: search results on Google are influenced by the popularity of other searches, algorithms are changed all the time for various reasons, and some tweaks that affect what people see about politics may not be the result of malicious engineers bent on changing the country’s political persuasions. However, the potential for that to happen is there – and the same risks apply to Facebook.

To be sure, many corporations, including broadcasters and media organisations, have used their vast power to influence elections in all sorts of ways in the past: whether it’s through money, advertising, editorials, or simply the way they present the news. But at no time has one company held so much influence over a large swath of the population – 40% of all news traffic now originates from Facebook – while also having the ability to make changes invisibly.

As Gizmodo reported, there’s no law stopping Facebook from doing so if it desires. “Facebook can promote or block any material that it wants,” UCLA law professor Eugene Volokh told Gizmodo. “Facebook has the same First Amendment right as the New York Times. They can completely block Trump if they want. They block him or promote him.”

To those disgusted by Trump’s xenophobia, his boorish and erratic behavior, this might seem like a welcome development. But one organisation having the means to tilt elections one way or another a dangerous innovation. Once started, it would be hard to control. In this specific case, a majority of the public might approve of the results. But do we really want future elections around the world to be decided by the political persuasions of Mark Zuckerberg, or the faceless engineers that control what pops up in your news feed?

 

http://www.theguardian.com/commentisfree/2016/apr/19/donald-trump-facebook-election-manipulate-behavior?CMP=fb_gu

US corporate tax cheats hiding $1.4 trillion in profits in offshore accounts

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By Patrick Martin
15 April 2016

A report issued Thursday by the British charity Oxfam found that the 50 largest US corporations are hiding $1.4 trillion in profits in overseas accounts to avoid US income taxes, much of it in tax havens like Bermuda and the Cayman Islands.

The biggest tax dodger is technology giant Apple, with $181 billion held offshore. General Electric had the second-largest stash, at $119 billion, enough to repay four times over the $28 billion GE received in federal guarantees during the 2008 Wall Street crash. Microsoft had $108 billion in overseas accounts, with companies like Exxon Mobil, Pfizer, IBM, Cisco Systems, Google, Merck, and Johnson & Johnson rounding out the top ten.

Overseas tax havens have been the focus of recent revelations about tax scams by wealthy individuals, based on the leak of the “Panama Papers,” documents from a single Panama-based law firm, Mossack Fonseca, involving 214,000 offshore shell companies. The firm’s clients included 29 billionaires and 140 top politicians worldwide, among them a dozen heads of government.

But the sums involved in corporate tax scams dwarf those hidden away by individuals. According to the Oxfam report, the offshore manipulations by the 50 largest US corporations cost the US taxpayer $111 billion each year, while robbing another $100 billion annually from countries overseas, many of them desperately poor.

The $111 billion a year in US taxes evaded would be sufficient to eliminate 90 percent of child poverty in America, effectively wiping out that social scourge. It is more than the annual cost of the food stamp program, or unemployment benefits, or the total budget of the Department of Education.

Oxfam timed the release of its report for the April 15 income tax deadline in the United States (actually Monday, April 18 this year), when tens of millions of working people must file their income tax returns or face federal penalties. Working people could face additional tax penalties of up to 2 percent of household income, to a maximum of $975, under the Obamacare “individual mandate,” if they have not purchased private health insurance.

There is a stark contrast between the IRS hounding of working people for relatively small amounts of money—but difficult or impossible to pay for those on low incomes—and the green light given to corporate tax cheats who evade taxation on trillions in income.

Federal Tax Paid vs Federal Loans, Bailouts, Loan Guarantees Received by 50 largest US companies 2008-2014

“As Americans rush to finalize tax returns, multinational corporations that benefit from trillions in taxpayer-funded support are dodging billions in taxes,” said Raymond C. Offenheiser, President of Oxfam America. “The vast sums large companies stash in tax havens should be fighting poverty and rebuilding America’s infrastructure, not hidden offshore in Panama, Bahamas, or the Cayman Islands.”

The Oxfam report, titled “Broken at the Top,” expresses concern that “tax dodging by multinational corporations…contributes to dangerous inequality that is undermining our social fabric and hindering economic growth.”

It continues: “This inequality is fueled by an economic and political system that benefits the rich and powerful at the expense of the rest, causing the gains of economic growth over the last several decades to go disproportionately to the already wealthy. Among the most damning examples of this rigged system is the way large, profitable companies use offshore tax havens, and other aggressive and secretive methods, to dramatically lower their corporate tax rates in the United States and developing countries alike.”

Oxfam collected figures available from the 10-K reports and other financial documents issued by the 50 largest US companies, covering the period since the Wall Street crash, 2008 through 2014, and presented them in an interactivetable. The figures included total profits, federal taxes paid, total US taxes paid (including state and local), lobbying expenses, tax breaks, money held in offshore accounts, and benefits received from the federal government, including loans, loan guarantees and bailouts.

Among the most important findings:

* The top 50 companies made nearly $4 trillion in profits globally, but paid only $412 billion in federal income tax, for an effective tax rate of barely 10 percent, compared to the statutory rate of 35 percent.

* The 50 companies spent $2.6 billion to influence the federal government, while reaping nearly $11.2 trillion in federal support, for an effective return of 400,000 percent on their lobbying expenses.

* The overseas cash stashed by the 50 companies, nearly $1.4 trillion, is larger than the Gross Domestic Product of Russia, Mexico, Spain or South Korea.

* US multinationals reported 43 percent of their foreign earnings from five tax havens, countries that accounted for only 4 percent of their foreign workforce and 7 percent of foreign investment. All told, US companies shifted between $500 billion and $700 billion in profits from countries where economic activity actually took place to countries where tax rates were low.

* In the year 2012 alone, US firms reported $80 billion in profits in Bermuda, more than their combined reported profits in the four largest economies (after the US itself): China, Japan, Germany and France. This figure was nearly 20 times the total GDP of the tiny island country.

The Oxfam report also pointed to an estimated $100 billion in taxes evaded in foreign countries, many of them rich in natural resources extracted by such global giants as Exxon, Chevron and Dow Chemical. According to the report, “Taxes paid, or unpaid, by multinational companies in poor countries can be the difference between life and death, poverty or opportunity. $100 billion is four times what the 47 least developed countries in the world spend on education for their 932 million citizens. $100 billion is equivalent to what it would cost to provide basic life-saving health services or safe water and sanitation to more than 2.2 billion people.”

The report cited former UN Secretary-General Kofi Annan’s assessment that “Africa loses more money each year to tax dodging than it receives in international development assistance.”

Oxfam offered no solution to the growth of inequality and the systematic looting by big corporations that its report documents, except to urge governments around the world to close tax loopholes. The group also pleads with the corporate bosses themselves not to be quite so greedy. Neither capitalist governments nor the CEOs will pay the slightest attention. But the working class should take note of these figures, which provide ample evidence of the bankrupt and reactionary nature of capitalism, and the urgent necessity of building a mass movement, on a global scale, to put an end to the profit system.

 

http://www.wsws.org/en/articles/2016/04/15/oxfa-a15.html

FBI wins court order forcing Apple to install backdoor in iPhone security systems

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By Thomas Gaist
18 February 2016

The Obama administration secured a court order from a California-based federal judge on Tuesday to force tech giant Apple to develop special software designed to compromise encryption security features embedded in the iPhone’s iOS 9 operating system.

The court decision, utilizing an obscure and antidemocratic law from the 18th century, is part of efforts to utilize last year’s attack in San Bernardino, California to intensify the assault on democratic rights and expand the police-state spying powers of the government.

The FBI and the Justice Department claim that the new software is necessary to enable federal investigators to search through an iPhone belonging to Syed Rizwan Farook, one of the attackers responsible for the mass shooting at the Inland Regional Center in San Bernardino.

At stake, however, is far more than the data on Farook’s phone. The government wants broad authority to bypass encryption mechanisms on any communications that it is not presently able to monitor.

US agents have been unable to access Farook’s phone as a result of Apple’s built-in “auto-erase” feature, which deletes the smartphone’s data after ten or more incorrect attempts to unlock it. The phone’s security features prevent the agency from employing its preferred method of “brute forcing” entry, i.e., trying every possible password.

Judge Sheri Pym of the Federal District Court for the District of Central California ruled Tuesday that Apple must find a way to “bypass and disable” the security features on Farook’s phone. Apple will appeal the ruling within days, and the case could be decided in the Supreme Court.

Government attorneys claim that the ruling compels Apple to design software that can penetrate the iPhone’s data protection systems, citing a statute known as the All Writs Act, which allows judges to “issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” The administration has adopted a broad interpretation of the law that effectively allows the courts to overrule constitutional limitations on state powers.

Making clear that the court action has the support of the White House, spokesman Josh Earnest said on Wednesday that the Justice Department and the FBI have the Obama administration’s “full support.”

The ruling is only the latest stage in the efforts of the Obama administration and the political establishment to use the attacks in San Bernardino to counter the widespread opposition to domestic spying that followed the revelations of NSA whistleblower Edward Snowden. Along with the terror attacks in Paris, the events in southern California have become the central pretext for a new expansion of the US government’s mass surveillance programs.

Snowden spoke out against the FBI assault on encryption Wednesday, describing the events as “the most important tech case in a decade.”

“The FBI is creating a world where citizens rely on Apple to defend their rights,” Snowden said in a tweet.

Apple, Google, Yahoo, Facebook and other leading firms entered into secret contracts with the US government from the mid-2000s onward, giving the NSA access to electronic communications data stored on their servers, as revealed in NSA documents released by Snowden beginning in the summer of 2013. The documents also showed that the NSA had set up numerous illegal and unconstitutional programs that seek to monitor all telephone records, emails and other communications in the US and internationally.

Pointing to the broad implications of the ruling in a letter released on Wednesday, Apple CEO Tim Cook described the government’s request as “unprecedented,” saying that the technology demanded by the FBI could be used against hundreds of millions of devices.

“It would be the equivalent of a master key,” Cook wrote. “Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several important security features.”

“The government is asking Apple to hack our own users,” Cook wrote. The spy software could be used to “intercept your messages, access your health records or financial data, track your location, or even access your phone’s microphone or camera without your knowledge.” The software hack would “have the potential to unlock any iPhone in someone’s physical possession.”

However, lest there be any doubt about Apple’s allegiance to the intelligence establishment and its “war on terror,” Cook went on to insist that Apple has “done everything that is both within our power and within the law to help [the FBI].”

“When the FBI has requested data that’s in our possession, we have provided it,” Cook wrote. “We have great respect for the professionals at the FBI, and we believe their intentions are good.”

Apple’s opposition to the FBI’s anti-encryption drive flows from the material interests of its shareholders. Apple is engaged in a competitive struggle for market share on a world scale and stands to lose business, both from consumers and from foreign governments, if it is perceived as being completely penetrated by the US spy apparatus.

According to an article in the New York Times, Apple had “hoped to resolve the impasse without having to rewrite their own encryption software.” The company was “frustrated by the Justice Department’s refusal to file its demands under seal rather than airing them in court, according to an industry executive with knowledge of the case.” In other words, because the request became publicly known, the company felt compelled to release a statement opposing the ruling.

Intelligence agencies have been pressing for legislation to bypass encryption mechanisms since long before the San Bernardino attacks. FBI Director James Comey has agitated for new laws requiring the installation of “backdoor” access to encryption technology almost continuously since taking office. The attacks, however, were immediately used to escalate the “war on terror campaign” and shift the entire political establishment to the right.

One of the possible outcomes of the dispute with Apple is the passage of legislation in Congress that would explicitly authorize the government to force companies to give it access to text messages and other encrypted data on cell phones. Leading Democrats and Republicans in Congress moved quickly to back the court decision and criticize Apple for opposing it.

The basic target of these moves—as with the police-state spying apparatus as a whole—is not the Islamic State or Al Qaeda, but all opposition to the American ruling class’s policy of war and social reaction. As the United States prepares for a massive escalation of military violence, it is at the same time intensifying the assault on democratic rights at home.

 

http://www.wsws.org/en/articles/2016/02/18/appl-f18.html

Cheap cab ride? You must have missed Uber’s true cost

When tech giants such as Google and Uber hide their wealth from taxation, they make it harder for us to use technology to improve services

A striking French taxi driver protests against Uber in Paris.
A striking French taxi driver protests against Uber in Paris. Photograph: Charles Platiau/Reuters

To understand why we see so few genuine alternatives to US technology giants, it’s instructive to compare the fate of a company like Uber – valued at more than $62.5bn (£44bn) – and that of Kutsuplus, an innovative Finnish startup forced to shut down late last year.

Kutsuplus’s aspiration was to be the Uber of public transport: it operated a network of minibuses that would pick up and drop passengers anywhere in Helsinki, with smartphones, algorithms and the cloud deployed to maximise efficiency, cut costs and provide a slick public service. Being a spinoff of a local university that operated on a shoestring budget, Kutsuplus did not have rich venture capitalists behind it. This, perhaps, is what contributed to its demise: the local transport authority found it too expensive, despite impressive year-on-year growth of 60%.

On the other hand, “expensive” is everything that Uber is not. While you might be tempted to ascribe the low costs of the service to its ingenuity and global scale – is it the Walmart of transport? – its affordability has a more banal provenance: sitting on tons of investor cash, Uber can afford to burn billions in order to knock out any competitors, be they old-school taxi companies or startups like Kutsuplus.

A recent article in The Information, a tech news site, suggests that during the first three quarters of 2015 Uber lost $1.7bn while booking $1.2bn in revenue. The company has so much money that, in at least some North American locations, it has been offering rides at rates so low that they didn’t even cover the combined cost of fuel and vehicle depreciation.

Uber’s game plan is simple: it wants to drive the rates so low as to increase demand – by luring some of the customers who would otherwise have used their own car or public transport. And to do that, it is willing to burn a lot of cash, while rapidly expanding into adjacent industries, from food to package delivery.

An obvious but rarely asked question is: whose cash is Uber burning? With investors like Google, Amazon’s Jeff Bezos and Goldman Sachs behind it, Uber is a perfect example of a company whose global expansion has been facilitated by the inability of governments to tax profits made by hi-tech and financial giants.

To put it bluntly: the reason why Uber has so much cash is because, well, governments no longer do. Instead, this money is parked in the offshore accounts of Silicon Valley and Wall Street firms. Look at Apple, which has recently announced that it sits on $200bn of potentially taxable overseas cash, or Facebook, which has just posted record profits of $3.69bn for 2015.

Some of these firms do choose to share their largesse with governments – both Apple and Google have agreed to pay tax bills far smaller than what they owe, in Italy and the UK respectively – but such moves aim at legitimising the questionable tax arrangements they have been using rather than paying their fair share.

Compare this with the dire state of affairs in which most governments and city administrations find themselves today. Starved of tax revenue, they often make things worse by committing themselves to the worst of austerity politics, shrinking the budgets dedicated to infrastructure, innovation, or creating alternatives to the rapacious “platform capitalism” of Silicon Valley.

Under these conditions, it’s no wonder that promising services like Kutsuplus have to shut down: cut from the seemingly endless cash supply of Google and Goldman Sachs, Uber would have gone under as well. It is, perhaps, no coincidence that Finland is one of the more religious advocates of austerity in Europe; having let Nokia go under, the country has now missed another chance.

Let us not be naive: Wall Street and Silicon Valley won’t subsidise transport for ever. While the prospect of using advertising to underwrite the costs of an Uber trip is still very remote, the only way for these firms to recoup their investments is by squeezing even more cash or productivity out of Uber drivers or by eventually – once all their competitors are out – raising the costs of the trip.

Both of these options spell trouble. Uber is already taking higher percentages from its drivers’ fares (this number is reported to have gone up from 20% to 30%), while also trying to pass on more costs related to background checks and safety education directly to its drivers (through the so-called safe rides fee).

The only choice here is between more precarity for drivers and more precarity for passengers, who will have to accept higher rates, with or without controversial practices like surge pricing (prices go up when demand is high).

Moreover, the company is actively trying to solidify its status as a default platform for transport. During the recent squabbles in France – where taxi drivers have been rioting to get the government to notice their plight – Uber has offered to open up its platforms to any professional taxi drivers who would like a second job.

Needless to say, such platforms – with properly administered and transparent payment, reputation and pricing systems – ought to have been established by cities a long time ago. This, along with the encouragement and support of startups like Kutsuplus, would have been the right regulatory response to Uber.

Unfortunately, there’s very little policy innovation in this space and the main response to Uber so far has come from other Uber-like companies unhappy with its dominance. Thus, India’s Ola, China’s Didi Kuaidi, US-based Lyft and Malaysia’s GrabTaxi have formed an alliance, allowing customers to book cabs from each other’s apps in countries where they operate. This falls short of creating a viable support system where innovators like Kutsuplus can flourish; replacing Uber with Lyft won’t solve the problem, as it pursues the same aggressive model.

The broader lesson here is that a country’s technology policy is directly dependent on its economic policy; one cannot flourish without the active support of the other. Decades of a rather lax attitude on taxation combined with strict adherence to the austerity agenda have eaten up the public resources available for experimenting with different modes of providing services like transport.

This has left tax-shrinking companies and venture capitalists – who view everyday life as an ideal playing ground for predatory entrepreneurship – as the only viable sources of support for such projects. Not surprisingly, so many of them start like Kutsuplus only to end up like Uber: such are the structural constraints of working with investors who expect exorbitant returns on their investments.

Finding and funding projects that would not have such constraints would not in itself be so hard; what will be hard, especially given the current economic climate, is finding the cash to invest in them.

Taxation seems the only way forward – alas, many governments do not have the courage to ask what is due to them; the compromise between Google and HM Treasury is a case in point.

 

http://www.theguardian.com/commentisfree/2016/jan/31/cheap-cab-ride-uber-true-cost-google-wealth-taxation?CMP=fb_gu

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