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The US is formalizing Team Telecom rules to restrict foreign ownership of internet and telecom assets
It has the simplest name, but the sort of shadowy overtones that national security writers lust after.
Team Telecom, a mostly informal working committee of the Departments of Defense, Homeland Security and Justice (along with affiliated agencies) has for years been quietly tasked with evaluating and maintaining the security of America telecom infrastructure in concert with the FCC. Its primary objective as far as we have been able to ascertain is to monitor the ownership of key telecom assets to ensure they don’t fall into the hands of suspect nations (think China, Russia, etc).
Last year, Mark Harris over on Extra Crunch took an in-depth look at the extreme delays companies can experience going through a Team Telecom review (membership required), which in the case of China Mobile’s expansion into the U.S., extended up to seven years before the Team rejected the Chinese bid for market entry.
That informal arrangement is disappearing, as the administration over the weekend published a new executive order formally instantiating Team Telecom as a legal process for reviewing applications for telecom licenses, deals and other requests made to the FCC.
Under a newly christened “Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector” (CAFPUSTSS?), the Committee will be charged with assisting “the FCC in its public interest review of national security and law enforcement concerns that may be raised by foreign participation in the United States telecommunications services sector.”
Like its Team Telecom forerunner, the Committee will be made up of the heads of Justice, Defense and Homeland Security, with the attorney general playing the role of chair. Applications to the Committee will be referred to the U.S. government’s highest-ranking intelligence officer, the Director of National Intelligence, for analysis.
Unlike in the past, where the timeline for reviews was anything but standardized, the executive order provides for a 120-day adjudication process, with a 90-day extension if the Committee has additional concerns and goes through a secondary review.
In a brief press statement, FCC Chairman Ajit Pai said, “I applaud the President for formalizing Team Telecom review and establishing a process that will allow the Executive Branch to provide its expert input to the FCC in a timely manner.” The FCC intends to finish its own rulemaking around Team Telecom, a process which was first proposed at the tail end of the Obama administration and has been on-going ever since.
These reforms to Team Telecom are in line with similar reforms made to CFIUS, the Committee for Foreign Investment in the United States, which were finalized at the beginning of this year after Congress passed a reform bill in 2018.
While the new rules will provide some certainty to areas of telecom like fiber optic cable expansion and wireless services, expect the new rules to be used to put even more restrictions on countries like China hoping to get a slice of the U.S. infrastructure market. Indeed, in the FCC’s statement today, the agency said, “As we demonstrated last year in rejecting the China Mobile application, this FCC will not hesitate to act to protect our networks from foreign threats.”
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Zoom will enable waiting rooms by default to stop Zoombombing
Zoom is making some drastic changes to prevent rampant abuse as trolls attack publicly-shared video calls. Starting April 5th, it will require passwords to enter calls via Meeting ID, since these may be guessed or reused. Meanwhile, it will change virtual waiting rooms to be on by default so hosts have to manually admit attendees.
The changes could prevent “Zoombombing”, a term I coined two weeks ago to describe malicious actors entering Zoom calls and disrupting them by screensharing offensive imagery. New Zoombombing tactics have since emerged, like spamming the chat thread with terrible GIFs, using virtual backgrounds to spread hateful messages, or just screaming profanities and slurs. Anonymous forums have now become breeding grounds for organized trolling efforts to raid calls.
Just imagine the most frightened look on all these people’s faces. That’s what happened when Zoombombers attacked the call.
The FBI has issued a warning about the Zoombombing problem after children’s online classes, alcoholics anonymous meetings, and private business calls were invaded by trolls. Security researchers have revealed many ways that attackers can infiltrate a call.
The problems stem from Zoom being designed for trusted enterprise use cases rather than cocktail hours, yoga classes, roundtable discussions, and classes. But with Zoom struggling to scale its infrastructure as its daily user count has shot up from 10 million to 200 million over the past month due to coronavirus shelter-in-place orders, it’s found itself caught off guard.
Zoom CEO Eric Yuan apologized for the security failures this week and vowed changes. But at the time, the company merely said it would default to making screensharing host-only and keeping waiting rooms on for its K-12 education users. Clearly it determined that wasn’t sufficient, so now waiting rooms are on by default for everyone.
Zoom communicated the changes to users via an email sent this afternoon that explains “we’ve chosen to enable passwords on your meetings and turn on Waiting Rooms by default as additional security enhancements to protect your privacy.”
The company also explained that “For meetings scheduled moving forward, the meeting password can be found in the invitation. For instant meetings, the password will be displayed in the Zoom client. The password can also be found in the meeting join URL.” Some other precautions users can take include disabling file transfer, screensharing, or rejoining by removed attendees.
NEW YORK, NY – APRIL 18: Zoom founder Eric Yuan reacts at the Nasdaq opening bell ceremony on April 18, 2019 in New York City. The video-conferencing software company announced it’s IPO priced at $36 per share, at an estimated value of $9.2 billion. (Photo by Kena Betancur/Getty Images)
The shift could cause some hassle for users. Hosts will be distracted by having to approve attendees out of the waiting room while they’re trying to lead calls. Zoom recommends users resend invites with passwords attached for Meeting ID-based calls scheduled for after April 5th. Scrambling to find passwords could make people late to calls.
But that’s a reasonable price to pay to keep people from being scarred by Zoombombing attacks. The rash of trolling threatened to sour many people’s early experiences with the video chat platform just as it’s been having its breakout moment. A single call marred by disturbing pornography can leave a stronger impression than 100 peaceful ones with friends and colleagues. The old settings made sense when it was merely an enterprise product, but it needed to embrace its own change of identity as it becomes a fundamental utility for everyone.
Technologists will need to grow better at anticipating worst-case scenarios as their products go mainstream and are adapted to new use cases. Assuming everyone will have the best intentions ignores the reality of human nature. There’s always someone looking to generate a profit, score power, or cause chaos from even the smallest opportunity. Building development teams that include skeptics and realists, rather than just visionary idealists, could keep ensure products get safeguarded from abuse before rather than after a scandal occurs.
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Twitter CEO’s weak argument why investors shouldn’t fire him
Twitter CEO Jack Dorsey might not spend six months a year in Africa, claims the real product development is under the hood and gives an excuse for deleting Vine before it could become TikTok. Today he tweeted, via Twitter’s investor relations account, a multi-pronged defense of his leadership and the company’s progress.
The proclamations come as notorious activist investor Elliott Management prepares to pressure Twitter into a slew of reforms, potentially including replacing Dorsey with a new CEO, Bloomberg reported last week. Sources confirmed to TechCrunch that Elliott has taken a 4% to 5% stake in Twitter. Elliott has previously bullied eBay, AT&T and other major corporations into making changes and triggered CEO departures.
…Focusing on one job and increasing accountability has made a huge difference for us. One of our core jobs is to keep people informed. We want to be a service that people turn to… to see what’s happening, to be a credible source that people learn from.
— Twitter Investor Relations (@TwitterIR) March 5, 2020
Specifically, Elliott is seeking change because of Twitter’s weak market performance, which as of last month had fallen 6.2% since July 2015, while Facebook had grown 121%. The corporate raider reportedly takes issue with Dorsey also running fintech giant Square, and having planned to spend up to six months a year in Africa. Dorsey tweeted that “Africa will define the future (especially the bitcoin one!),” despite cryptocurrency having little to do with Twitter.
Rapid executive turnover is another sore spot. Finally, Twitter is seen as moving glacially slow on product development, with little about its core service changing in the past five years beyond a move from 140 to 280 characters per tweet. Competing social apps like Facebook and Snapchat have made landmark acquisitions and launched significant new products like Marketplace, Stories and Discover.
Dorsey spoke today at the Morgan Stanley investor conference, though apparently didn’t field questions about Elliott’s incursion. The CEO did take to his platform to lay out an argument for why Twitter is doing better than it looks, though without mentioning the activist investor directly. That type of response, without mentioning to whom it’s directed, is popularly known as a subtweet. Here’s what he outlined:
On democracy: Twitter has prioritized healthy conversation and now “the #1 initiative is the integrity of the conversation around the elections” around the world, which it’s learning from. It’s now using humans and machine learning to weed out misinformation, yet Twitter still hasn’t rolled out labels on false news despite Facebook launching them in late 2016.
On revenue: Twitter expects to complete a rebuild of its core ad server in the first half of 2020, and it’s improving the experience of mobile app install ads so it can court more performance ad dollars. This comes seven years late to Facebook’s big push around app install ads.
On shutting down products: Dorsey claims that “5 years ago we had to do a really hard reset and that takes time to build from… we had been a company that was trying to do too many things…” But was it? Other than Moments, which largely flopped, and the move to the algorithmic feed ranking, Twitter sure didn’t seem to be doing too much and was already being criticized for slow product evolution as it tried to avoid disturbing its most hardcore users.
On stagnation: “Some people talk about the slow pace of development at Twitter. The expectation is to see surface level changes, but the most impactful changes are happening below the surface,” Dorsey claims, citing using machine learning to improve feed and notification relevance.
Yet it seems telling that Twitter suddenly announced yesterday that it was testing Instagram Stories-esque feature Fleets in Brazil. No launch event. No U.S. beta. No indication of when it might roll out elsewhere. It seems like hasty and suspiciously convenient timing for a reveal that might convince investors it is actually building new things.
On talent: Twitter is apparently hiring top engineers “that maybe we couldn’t get 3 years ago.” 2017 was also Twitter’s share price low point of $14 compared to $34 today, so it’s not much of an accomplishment that hiring is easier now. Dorsey claims that “Engineering is my main focus. Everything else follows from that.” Yet it’s been years since fail whales were prevalent, and the core concern now is that there’s not enough to do on Twitter, rather than what it does offer doesn’t function well.
On Jack himself: Dorsey says he should have added more context “about my intention to spend a few months in Africa this year,” including its growing population that’s still getting online. Yet the “Huge opportunity especially for young people to join Twitter” seemed far from his mind as he focused on how crypto trading was driving adoption of Square’s Cash App.
“I need to reevaluate” the plan to work from Africa “in light of COVID-19 and everything else going on.” That makes coronavirus a nice scapegoat for the decision while the phrase “everything else” is doing some very heavy lifting in the face of Elliott’s activist investing.
Photographer: Cole Burston/Bloomberg via Getty Images
On fighting harassment: Nothing. The fact that Twitter’s most severe ongoing problem doesn’t even get a mention should clue you in to how many troubles have stacked up in front of Dorsey.
Running Twitter is a big job. So big it’s seen a slew of leaders ranging from founders like Ev Williams to hired guns like Dick Costolo peel off after mediocre performance. If Dorsey wants to stay CEO, that should be his full-time, work-from-headquarters gig.
This isn’t just another business. Twitter is a crucial communications utility for the world. Its absence of innovation, failure to defend vulnerable users and an inability to deliver financially has massive repercussions for society. It means Twitter hasn’t had the products or kept the users to earn the profits to be able to invest in solving its problems. Making Twitter live up to its potential is no side hustle.
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FTC votes to review influencer marketing rules & penalties
Undisclosed influencer marketing posts on social media should trigger financial penalties, according to a statement released today by the Federal Trade Commission’s Rohit Chopra. The FTC has voted 5-0 to approve a Federal Register notice calling for public comments on questions related to whether The Endorsement Guides for advertising need to be updated.
“When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.”
Currently the non-binding Endorsement Guides stipulate that “when there is a connection between an endorser and a seller of an advertised product that could affect the weight or credibility of the endorsement, the connection must be clearly and conspicuously disclosed.” In the case of social media, that means creators need to note their post is part of an “ad,” “sponsored” content or “paid partnership.”
But Chopra wants the FTC to consider making those rules official by “Codifying elements of the existing endorsement guides into formal rules so that violators can be liable for civil penalties under Section 5(m)(1)(A) and liable for damages under Section 19.” He cites weak enforcement to date, noting that in the case of department store Lord & Taylor not insisting 50 paid influencers specify their posts were sponsored, “the Commission settled the matter for no customer refunds, no forfeiture of ill-gotten gains, no notice to consumers, no deletion of wrongfully obtained personal data, and no findings or admission of liability.”
Strangely, Chopra fixates on Instagram’s Branded Content Ads that let marketers pay to turn posts by influencers tagging brands into ads. However, these ads include a clear “Sponsored. Paid partnership with [brand]” and seem to meet all necessary disclosure requirements. He also mentions concerns about sponcon on YouTube and TikTok.
Additional targets of the FTC’s review will be use of fake or incentivized reviews. It’s seeking public comment on whether free or discounted products influence reviews and should require disclosure, how to handle affiliate links and whether warnings should be posted by advertisers or review sites about incentivized reviews. It also wants to know about how influencer marketing affects and is understood by children.
Chopra wisely suggests the FTC focus on the platforms and advertisers that are earning tons of money from potentially undisclosed influencer marketing, rather than the smaller influencers themselves who might not be as well versed in the law and are just trying to hustle. “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern,” he writes, but “when we do not hold lawbreaking companies accountable, this harms every honest business looking to compete fairly.”
While many of the social media platforms have moved to self-police with rules about revealing paid partnerships, there remain gray areas around incentives like free clothes or discount rates. Codifying what constitutes incentivized endorsement, formally demanding social media platforms to implement policies and features for disclosure and making influencer marketing contracts state that participation must be disclosed would all be sensible updates.
Society has enough trouble with misinformation on the internet, from trolls to election meddlers. They should at least be able to trust that if someone says they love their new jacket, they didn’t secretly get paid for it.
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Reset Button is approaching student debt from a new angle
Student loan debt in the U.S. totals $1.5 trillion, and more than 44 million Americans have outstanding student loan debt.
According to research by Villanova law professor Jason Iuliano, a million student loan debtors have filed for bankruptcy in the past five years. However, 99.9% of them did not include their student loan debt in their bankruptcy filing.
This research was the seed of what would become Reset Button, a new startup founded by Iuliano and Rob Hunter looking to help student loan debtors who have gone through bankruptcy find a new way to include those debts in their filing.
The only way you can include student loan debt in a bankruptcy filing is through litigation. Those cases have been historically less likely to settle out of court than other types of civil cases.
This means that the cost of including student loan debt in bankruptcy filings is, at the very least, around $10,000. Now, if there was some guarantee that you could trade hundreds of thousands of dollars of student loan debt for $10,000-$15,000, you’d obviously do it. But most folks who are already in the process of filing for bankruptcy don’t have a spare $10,000 minimum to spend on a litigator. And even if they did, there is no guarantee they’d win in court, resulting in even more debt and no relief.
This is what Reset Button is trying to change.
To be clear, Reset Button is targeted directly at folks who have already filed for bankruptcy but were told they couldn’t include their student loan debt in those filings, and so they didn’t.
Here’s how it works:
Reset Button has built a network of litigation lawyers who have experience in seeking student loan discharges. When a new user fires up Reset Button, the startup sends them through an evaluation process that collects financial information, etc. to assess whether or not one of those lawyers could litigate the discharge of that user’s student loan debt. That evaluation factors in a number of signals, including past legal cases that are comparable to the user’s situation.
That process also does a lot of the heavy lifting that makes hiring a litigator so expensive. These lawyers often have to do tons of research, tracking down statements and bills and other paperwork, before they can truly get started with the litigation.
Reset Button, as the connective tissue between debtor and lawyer, is able to automate a lot of that process for the lawyers, delivering a package of information on the case and connecting the user with the right lawyer for them.
Reset is also looking to bring down the cost for debtors. The company charges either 12% of the total debt discharged, or $10,000 (whichever is lowest). Reset also allows users to pay that sum over time, in $300 monthly installments. This is in stark contrast to people who hire their own lawyer, who would be responsible for the costs upfront.
Reset Button is able to do this through a payment process called factoring. In short, Reset buys the receivables from the attorney’s fees, and charges the debtor with their own payment plan. Reset makes money from lawyers who pay for the lead generation, the technology services and the marketing apparatus.
Factoring has come under fire from some who say that service providers sometimes raise prices to account for their fee, but Reset Button co-founders Hunter and Iuliano say their lawyers are actually charging less because of the workflow optimization provided by Reset Button.
The company also provides a Knowledge Base for debtors seeking financial guidance and resources, but the only revenue stream comes from the actual litigation of student loan debt in bankruptcy filings. Other services like refinancing, debt consolidation or income-based payments are not provided by Reset Button, and the company has no official partnerships with those types of service providers.
However, Hunter said that it may be an avenue the company explores as it grows.
Perhaps most importantly, Reset Button offers a Fresh Start guarantee. In short, if the lawyer doesn’t manage to get your debt wiped, Reset will pay your legal bills.
There has been movement in the landscape of student loan discharges with bankruptcy.
Essentially, debtors must prove in court that they pass the test of “undue hardship,” which is a notably vague framework. Though there is a bit of variability among the various court circuits, the general idea is that a debtor must prove that they can’t currently pay back the loan, that there will not be a change down the line that will allow them to pay the loan in the future and that they have made every effort to pay the loans in the past.
Historically, that’s been a difficult threshold to cross for the fraction of people who take steps to litigate their student loan debt. However, in small ways, courts seem to be opening up the interpretation of undue hardship.
“There’s a phrase that gets used in these cases that I think perpetuates this myth, and that is to call it a ‘certainty of hopelessness’,” said John Rao, attorney with the National Consumer Law Center. “And it’s almost like, as long as you’re still alive and breathing, something could improve for you. That’s just an impossible burden. It’s basically saying you could win the lottery or something. That’s just not the standard I think Congress had in mind.”
In 2015, in a case between Robert E. Murphy and the DOE/ECMC, Rao wrote to the courts arguing that they should reassess the test for undue hardship:
Rather than adopt one existing test over another, we urge this Court to provide a formulation of the undue hardship standard in simple terms, that restricts consideration of extraneous and inappropriate factors not consistent with the statutory language. A finding about whether a debtor’s hardship is likely to persist should be based on hard facts, not conjecture and unsubstantiated optimism.
More recently, a judge in the Southern District of New York ruled in favor of a debtor, wiping more than $200,000 in Kevin Rosenberg’s student debt. Of course, the lenders will be appealing the case.
However, Judge Morris, who presided over the case, wrote in her decision that “most people (bankruptcy professionals as well as lay individuals) believe it impossible to discharge student loans,” and that her “Court will not participate in perpetuating these myths.”
Reset Button has raised money from investors Craft Ventures, Slow Ventures and Jeff Morris Jr. of Lambda School, among others. The company declined to share its total amount of investment.
“Society has been led to believe something for decades that is not true, which is probably the biggest initial challenge,” said founder and CEO Rob Hunter . “One of the unfortunate things is the reason that many consumers believe incorrect information is because a lawyer told them that. So, that is a bit of an uphill battle to swim against.”
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France improves stock options policies for startup employees
A couple of weeks ago, France’s digital minister Cédric O announced some changes when it comes to stock options in France. President Emmanuel Macron is going to talk about the new policy today ahead of the World Economic Forum.
While I don’t want to be too technical, here’s a quick overview of the changes.
First, the price of stock options (also known as BSPCE in France) won’t be based on the same VC-determined valuation. Let’s take an example — a VC fund invests in a Series A round, valuing the company at €12 million.
If you join the company after, you can get stock options based on a lower valuation, which increases the chances of higher returns. Going forward, there will be a different valuation for employees getting stock options.
Second, if you work for a foreign startup but you’re based in France, you couldn’t receive stock options. For instance, if you’re a Citymapper employee — a startup that is headquartered in London — based out of the Paris office, you could forget about stock options. Employees based in France can now receive stock options even if the company isn’t incorporated in France.
Third, the French Tech Visa now also works for foreign companies with an office in Paris. If you work for Berlin-based N26 and you want to hire a great Brazilian data scientist in your Paris office, you can now go through the fast-track visa process for startup employees.
Last year, VC firm Index Ventures coordinated an effort to overhaul stock option policies across Europe by lobbying policymakers. Hundreds of tech CEOs have signed the ‘Not Optional’ letter since then.
According to Index Ventures, Germany, Spain and Belgium are the lowest-ranked European countries when it comes to the regulatory framework around stock options.
Loi de finances 2020 : des mesures fortes pour les startups et leurs salariés. Soutien continu et renforcé aux entreprises de la #FrenchTech qui créeront + de 25 000 emplois directs en 2020 partout en France et pour tous les niveaux de compétence #PLF2020 pic.twitter.com/4qGafp5zYH
— Cédric O (@cedric_o) December 30, 2019
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TechCrunch’s Top 10 investigative reports from 2019
Facebook spying on teens, Twitter accounts hijacked by terrorists, and sexual abuse imagery found on Bing and Giphy were amongst the ugly truths revealed by TechCrunch’s investigating reporting in 2019. The tech industry needs more watchdogs than ever as its size enlargens the impact of safety failures and the abuse of power. Whether through malice, naivety, or greed, there was plenty of wrongdoing to sniff out.
Led by our security expert Zack Whittaker, TechCrunch undertook more long-form investigations this year to tackle these growing issues. Our coverage of fundraises, product launches, and glamorous exits only tell half the story. As perhaps the biggest and longest running news outlet dedicated to startups (and the giants they become), we’re responsible for keeping these companies honest and pushing for a more ethical and transparent approach to technology.
If you have a tip potentially worthy of an investigation, contact TechCrunch at tips@techcrunch.com or by using our anonymous tip line’s form.
Image: Bryce Durbin/TechCrunch
Here are our top 10 investigations from 2019, and their impact:
Facebook pays teens to spy on their data
Josh Constine’s landmark investigation discovered that Facebook was paying teens and adults $20 in gift cards per month to install a VPN that sent Facebook all their sensitive mobile data for market research purposes. The laundry list of problems with Facebook Research included not informing 187,000 users the data would go to Facebook until they signed up for “Project Atlas”, not receiving proper parental consent for over 4300 minors, and threatening legal action if a user spoke publicly about the program. The program also abused Apple’s enterprise certificate program designed only for distribution of employee-only apps within companies to avoid the App Store review process.
The fallout was enormous. Lawmakers wrote angry letters to Facebook. TechCrunch soon discovered a similar market research program from Google called Screenwise Meter that the company promptly shut down. Apple punished both Google and Facebook by shutting down all their employee-only apps for a day, causing office disruptions since Facebookers couldn’t access their shuttle schedule or lunch menu. Facebook tried to claim the program was above board, but finally succumbed to the backlash and shut down Facebook Research and all paid data collection programs for users under 18. Most importantly, the investigation led Facebook to shut down its Onavo app, which offered a VPN but in reality sucked in tons of mobile usage data to figure out which competitors to copy. Onavo helped Facebook realize it should acquire messaging rival WhatsApp for $19 billion, and it’s now at the center of anti-trust investigations into the company. TechCrunch’s reporting weakened Facebook’s exploitative market surveillance, pitted tech’s giants against each other, and raised the bar for transparency and ethics in data collection.
Protecting The WannaCry Kill Switch
Zack Whittaker’s profile of the heroes who helped save the internet from the fast-spreading WannaCry ransomware reveals the precarious nature of cybersecurity. The gripping tale documenting Marcus Hutchins’ benevolent work establishing the WannaCry kill switch may have contributed to a judge’s decision to sentence him to just one year of supervised release instead of 10 years in prison for an unrelated charge of creating malware as a teenager.
The dangers of Elon Musk’s tunnel
TechCrunch contributor Mark Harris’ investigation discovered inadequate emergency exits and more problems with Elon Musk’s plan for his Boring Company to build a Washington D.C.-to-Baltimore tunnel. Consulting fire safety and tunnel engineering experts, Harris build a strong case for why state and local governments should be suspicious of technology disrupters cutting corners in public infrastructure.
Bing image search is full of child abuse
Josh Constine’s investigation exposed how Bing’s image search results both showed child sexual abuse imagery, but also suggested search terms to innocent users that would surface this illegal material. A tip led Constine to commission a report by anti-abuse startup AntiToxin (now L1ght), forcing Microsoft to commit to UK regulators that it would make significant changes to stop this from happening. However, a follow-up investigation by the New York Times citing TechCrunch’s report revealed Bing had made little progress.
Expelled despite exculpatory data
Zack Whittaker’s investigation surfaced contradictory evidence in a case of alleged grade tampering by Tufts student Tiffany Filler who was questionably expelled. The article casts significant doubt on the accusations, and that could help the student get a fair shot at future academic or professional endeavors.
Burned by an educational laptop
Natasha Lomas’ chronicle of troubles at educational computer hardware startup pi-top, including a device malfunction that injured a U.S. student. An internal email revealed the student had suffered a “a very nasty finger burn” from a pi-top 3 laptop designed to be disassembled. Reliability issues swelled and layoffs ensued. The report highlights how startups operating in the physical world, especially around sensitive populations like students, must make safety a top priority.
Giphy fails to block child abuse imagery
Sarah Perez and Zack Whittaker teamed up with child protection startup L1ght to expose Giphy’s negligence in blocking sexual abuse imagery. The report revealed how criminals used the site to share illegal imagery, which was then accidentally indexed by search engines. TechCrunch’s investigation demonstrated that it’s not just public tech giants who need to be more vigilant about their content.
Airbnb’s weakness on anti-discrimination
Megan Rose Dickey explored a botched case of discrimination policy enforcement by Airbnb when a blind and deaf traveler’s reservation was cancelled because they have a guide dog. Airbnb tried to just “educate” the host who was accused of discrimination instead of levying any real punishment until Dickey’s reporting pushed it to suspend them for a month. The investigation reveals the lengths Airbnb goes to in order to protect its money-generating hosts, and how policy problems could mar its IPO.
Expired emails let terrorists tweet propaganda
Zack Whittaker discovered that Islamic State propaganda was being spread through hijacked Twitter accounts. His investigation revealed that if the email address associated with a Twitter account expired, attackers could re-register it to gain access and then receive password resets sent from Twitter. The article revealed the savvy but not necessarily sophisticated ways terrorist groups are exploiting big tech’s security shortcomings, and identified a dangerous loophole for all sites to close.
Porn & gambling apps slip past Apple
Josh Constine found dozens of pornography and real-money gambling apps had broken Apple’s rules but avoided App Store review by abusing its enterprise certificate program — many based in China. The report revealed the weak and easily defrauded requirements to receive an enterprise certificate. Seven months later, Apple revealed a spike in porn and gambling app takedown requests from China. The investigation could push Apple to tighten its enterprise certificate policies, and proved the company has plenty of its own problems to handle despite CEO Tim Cook’s frequent jabs at the policies of other tech giants.
Bonus: HQ Trivia employees fired for trying to remove CEO
This Game Of Thrones-worthy tale was too intriguing to leave out, even if the impact was more of a warning to all startup executives. Josh Constine’s look inside gaming startup HQ Trivia revealed a saga of employee revolt in response to its CEO’s ineptitude and inaction as the company nose-dived. Employees who organized a petition to the board to remove the CEO were fired, leading to further talent departures and stagnation. The investigation served to remind startup executives that they are responsible to their employees, who can exert power through collective action or their exodus.
If you have a tip for Josh Constine, you can reach him via encrypted Signal or text at (585)750-5674, joshc at TechCrunch dot com, or through Twitter DMs
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Taiwan’s entrepreneurs move forward after tense presidential election
Last Saturday, Taiwanese voters re-elected President Tsai Ing-wen to her second term after an election that split the country among generational and ideological lines. A crucial issue were the differences in how Tsai, a member of the Democratic Progressive Party (DPP), and her main opponent, Han Kuo-yu of the Kuomintang (KMT), approach Taiwan’s fraught relationship with China.
Despite the highly polarizing run-up to the election, however, both the DPP and KMT have taken measures to foster entrepreneurship in Taiwan. Now that Tsai has won, many investors don’t expect a dramatic impact, but instead are keeping an eye on how policies put in motion by both parties will play out. They are also looking for political allies who understand the startup ecosystem in Taiwan, which is often overshadowed by large hardware OEMs and semiconductor companies.
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Joseph Huang, an investment partner at Infinity Ventures, has worked with both the DPP and KMT as limited partners, and says “from our side, they are always asking for how to create more awareness of Taiwan startups, how do we help them with institutions, how do we help them more?”
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Zuckerberg ditches annual challenges, but needs cynics to fix 2030
Mark Zuckerberg won’t be spending 2020 focused on wearing ties, learning Mandarin or just fixing Facebook. “Rather than having year-to-year challenges, I’ve tried to think about what I hope the world and my life will look in 2030,” he wrote today on Facebook. As you might have guessed, though, Zuckerberg’s vision for an improved planet involves a lot more of Facebook’s family of apps.
His biggest proclamations in today’s notes include that:
- AR – Phones will remain the primary computing platform for most of the decade but augmented reality could get devices out from between us so we can be present together — Facebook is building AR glasses
- VR – Better virtual reality technology could address the housing crisis by letting people work from anywhere — Facebook is building Oculus
- Privacy – The internet has created a global community where people find it hard to establish themselves as unique, so smaller online groups could make people feel special again — Facebook is building more private groups and messaging options
- Regulation – The big questions facing technology are too thorny for private companies to address by themselves, and governments must step in around elections, content moderation, data portability and privacy — Facebook is trying to self-regulate on these and everywhere else to deter overly onerous lawmaking
These are all reasonable predictions and suggestions. However, Zuckerberg’s post does little to address how the broadening of Facebook’s services in the 2010s also contributed to a lot of the problems he presents:
- Isolation – Constant passive feed scrolling on Facebook and Instagram has created a way to seem like you’re being social without having true back-and-forth interaction with friends
- Gentrification – Facebook’s shuttled employees have driven up rents in cities around the world, especially the Bay Area
- Envy – Facebook’s algorithms can make anyone without a glamorous, Instagram-worthy life look less important, while hackers can steal accounts and its moderation systems can accidentally suspend profiles with little recourse for most users
- Negligence – The growth-first mentality led Facebook’s policies and safety to lag behind its impact, creating the kind of democracy, content, anti-competition and privacy questions it’s now asking the government to answer for it
Noticeably absent from Zuckerberg’s post are explicit mentions of some of Facebook’s more controversial products and initiatives. He writes about “decentralizing opportunity” by giving small businesses commerce tools, but never mentions cryptocurrency, blockchain or Libra directly. Instead he seems to suggest that Instagram store fronts, Messenger customer support and WhatsApp remittance might be sufficient. He also largely leaves out Portal, Facebook’s smart screen that could help distant families stay closer, but that some see as a surveillance and data collection tool.
I’m glad Zuckerberg is taking his role as a public figure and the steward of one of humanity’s fundamental utilities more seriously. His willingness to even think about some of these long-term issues instead of just quarterly profits is important. Optimism is necessary to create what doesn’t exist.
Still, if Zuckerberg wants 2030 to look better for the world, and for the world to look more kindly on Facebook, he may need to hire more skeptics and cynics that see a dystopic future instead — people who understand human impulses toward greed and vanity. Their foresight on where societal problems could arise from Facebook’s products could help temper Zuckerberg’s team of idealists to create a company that balances the potential of the future with the risks to the present.
Every new year of the last decade I set a personal challenge. My goal was to grow in new ways outside my day-to-day work…
Posted by Mark Zuckerberg on Thursday, January 9, 2020
For more on why Facebook can’t succeed on idealism alone, read:
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How gig economy giants are trying to keep workers classified as independent contractors
Now that 2020 has started, Uber, DoorDash and Lyft are taking additional steps to undermine a new California law that would help more gig workers qualify as full-time employees. These moves entail product changes, lawsuits and ramped-up efforts to get a ballot initiative in front of voters that would roll back the new legislation.
Let’s start with the most recent development; yesterday, Uber sent a note to users announcing that it’s getting rid of upfront pricing in favor of estimated prices, unless they’re Uber Pool rides.
“Due to a new state law, we are making some changes to help ensure that Uber remains a dependable source of flexible work for California drivers,” Uber wrote in an email to customers. “These changes may take some getting used to, but our goal is to keep Uber available to as many qualified drivers as possible, without restricting the number of drivers who can work at a given time.”
Uber says it also has to discontinue rewards benefits like price protection on a route and flexible cancellations for trips in California. For drivers, that means they won’t see estimated earnings and drivers in surge arteas will no longer see fixed dollar amounts.
“AB5 threatens to restrict or eliminate opportunities for independent workers across a wide spectrum of industries, including trucking, freelance journalism and ridesharing,” an Uber spokesperson told TechCrunch. “As a result of AB5, we’ve made a number of product changes to preserve flexible work for tens of thousands of California drivers. At the same time, we’ve put forward a progressive package of new protections for drivers, including guaranteed minimum earnings and benefits, so voters can choose to truly improve flexible work in November.”
While Uber is essentially saying this is something the company must do, it’s worth noting that this is not some requirement of the new law; this is Uber’s attempt to beef up its case that it’s legally allowed to classify drivers as independent contractors. Since much of the rationale for determining whether or not a worker is an employee comes down to control, removing upfront fares and ditching penalties for rejecting fares could help Uber make a case that its drivers are operating on their own accord.
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