Saturday, July 9, 2022

ExecutiveTower

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Musk’s Attempt To Get Out Of The Twitter Deal Proceeding Exactly As Predicted; What Happens Next?

from the musk-has-no-poker-face dept

by Mike Masnick - July 8th @ 5:38pm

In news that is not surprising at all, and seems to be playing out just as people predicted a month ago, Elon Musk has officially claimed that Twitter is in breach of its merger agreement and says he’s pulling out of the deal. The actual details, of course, are not that simple. There is no actual escape hatch like that here. Musk made a legal agreement to pay $44 billion for the company and can’t just walk away.

As we noted back in June, he appeared to have hired some very expensive lawyers to come up with some sort of pretext for walking away, and it’s playing out exactly in the manner described. Musk had specifically waived his rights to due diligence prior to the deal, but the merger agreement did include a promise to provide Musk with necessary data to conclude the deal.

For much of the month of May, Musk (who must be a terrible fucking poker player) telegraphed his intentions to bail on the deal by whining about how much spam there was. This made no sense at any level. First, when Musk announced the deal, he insisted he was doing it in order to tackle the spam challenge on the platform (a problem that really doesn’t impact most users of the site — but does impact the very most high profile users like Musk). So to then suddenly start whining about spam seems transparently a pretext.

Also, it was a pretext that couldn’t void the deal.

So, his second attempt to come up with an excuse was to claim that Twitter publicly lied to the SEC in its filings regarding how much spam was counted among its monetizable daily active users. This also seemed ridiculous, as Twitter had been publicly reporting those numbers for quite some time, and Musk could have explored those prior to the deal itself but, again, deliberately chose to waive those rights. You can’t do a deal in which you agree not to explore the data, and then complain that you hadn’t seen the data.

Somewhere around this time, it seems clear that Musk’s lawyers explained to him that this wouldn’t get them out of the deal, and (it seems likely) suggested that they could cook up some alternative pretext that at least someone could try to actually argue in court — because it was clear that court is where this would all end up.

And thus, behold the bullshit brilliance of the lawyers at Skadden, Arps, who earned their large paycheck by zeroing in on the part of the deal about needing to supply Musk with the information necessary to close the deal. They just started requesting tons of data, specifically related to the whole spam/mDAU discussion, knowing that they could just keep asking for more data, some of it impossible to actually supply to Musk, and eventually they would be able to say that Twitter wasn’t supplying the data requested, and thus was in breach… and therefore the deal was off.

And, that’s exactly what happened. From the letter to Twitter:

Notwithstanding these repeated requests over the past two months, Twitter has still failed to provide much of the data and information responsive to Mr. Musk's repeated requests, including, but not limited to:

  1. Information related to Twitter's process for auditing the inclusion of spam and fake accounts in mDAU. Twitter has still not provided much of the information specifically requested by Mr. Musk in Sections 1.01-1.03 of the May 19 diligence request list that is necessary for him to make an assessment of the prevalence of false or spam accounts on its website. As recently as the June 29 Letter, Mr. Musk reiterated this long-standing request for information related to Twitter's sampling process for detecting fake accounts. The June 29 Letter identified specific data necessary to enable Mr. Musk to independently verify Twitter's representations regarding the number of mDAU on its platform—including, but not limited to (1) daily global mDAU data since October 1, 2020; (2) information regarding the sampling population for mDAU, including whether the mDAU population used for auditing spam and false accounts is the same mDAU population used for quarterly reporting; (3) outputs of each step of the sampling process for each day during the weeks of January 30, 2022 and June 19, 2022; (4) documentation or other guidance provided to contractor agents used for auditing mDAU samples; (5) information regarding the user interface of Twitter's ADAP tool and any internal tools used by the contractor agents; and (6) mDAU audit sampling information, including anonymized information identifying the contractor agents and Quality Analyst that reviewed each sampled account, the designation given by each contractor agent and Quality Analyst, and the current status of any accounts labelled "compromised." A subsequent request along these lines should not have been necessary, as this information should have been provided in response to Mr. Musk's original diligence request. Yet, to date, Twitter has not provided any of this information.
  2. Information related to Twitter's process for identifying and suspending spam and fake accounts. In addition to information regarding Twitter's mDAU audits, the June 29 Letter also reiterated requests for data specifically identified in Sections 1.04-1.05 of the May 19 diligence request list regarding Twitter's methodology and performance data relating to identification and suspension of spam and false accounts, including, but not limited to, information regarding account suspensions, including information sufficient to identify daily numbers of account suspensions since October 2020 and numbers of account suspensions for each of Twitter's internal reasons for suspension. In addition, during the June 30, 2022 call, Twitter's representatives indicated for the first time that the workflow and processes for detecting spam and false accounts in the mDAU population is different and separate from the workflow and processes for identifying and suspending accounts in violation of Twitter's policies. On that call, Twitter indicated that it would not be willing to provide information regarding the methodologies employed to identify and suspend such accounts.
  3. Daily measures of mDAU for the past eight (8) quarters. On June 17, 2022 (the "June 17 Letter") Mr. Musk reiterated his request for "access to the sample set used and calculations performed, as well as any related reports or analysis, to support Twitter's representation that fewer than 5% of its mDAUs are false or spam account." To that end, Mr. Musk requested that Twitter provide "daily measures of mDAU for the previous eight quarters, and through the present." This information is derivative of the information Mr. Musk first sought in Sections 1.01-1.03 of the May 19 diligence request list. Although Twitter has provided certain summary data regarding the mDAU calculations, Twitter has not provided the complete daily measures as requested.
  4. Board materials related to Twitter's mDAU calculations. In the June 17 Letter, Mr. Musk requested a variety of board materials and communications related to Twitter's mDAU metric, its calculation of the number of spam and false accounts, its disclosure of the mDAU metric, and the company's disclosure of the number of spam accounts on the platform. Twitter has provided an incomplete data set in response to this request, and has not provided information sufficient to enable Mr. Musk to make an independent assessment of Twitter's board and management's understanding of its mDAU metric.
  5. Materials related to Twitter's financial condition. Mr. Musk is entitled, under Section 6.4 of the Merger Agreement to "all information concerning the business … of the Company … for any reasonable business purpose related to the consummation of the transactions" and under Section 6.11 of the Merger Agreement, to information "reasonably requested" in connection with his efforts to secure the debt financing necessary to consummate the transaction. To that end, Mr. Musk requested on June 17 a variety of board materials, including a working, bottoms-up financial model for 2022, a budget for 2022, an updated draft plan or budget, and a working copy of Goldman Sachs' valuation model underlying its fairness opinion. Twitter has provided only a pdf copy of Goldman Sachs' final Board presentation.

This is all just a very expensive way of saying “you promised us to provide us everything we needed, so we kept asking for more and more ridiculous, and impossible-to-actually-deliver information until we could claim you weren’t giving us what we needed, and so now we can claim you’re in breach.”

I mean, they list out five different requests, but the first four are all variations on the same made up nonsense request. And the last one is just thrown in as a Hail Mary in case the court sees through the first four.

Musk’s lawyers try to claim that the information that Twitter did provide Musk — basically access to the full Twitter Firehose API (which was always a kind of middle-finger to Musk’s bogus insincere request in the first place) — wasn’t enough to satisfy the agreement because, in part, it treated Musk like a common every day customer. *shudder*

Twitter only offered to provide Mr. Musk with the same level of access as some of its customers after we explained that throttling the rate limit prevented Mr. Musk and his advisors from performing the analysis that he wished to conduct in any reasonable period of time.

And, if you really want any extra proof that this was all pretextual and planned out back in May, and executed over the last month, Musk is doing this basically on the first day he can. The original merger agreement included a termination clause for contractual breach, with a 30 calendar day notice. It has been exactly 30 days since Musk sent that obviously pretextual complaint about providing data. We hit the deadline, and now Musk says he’s out.

Somewhat hilariously, Musk’s lawyers throw one more Hail Mary in at the end of the letter, claiming that because there were some management changes after the merger agreement was announced — including both some executive firings and some who just chose to get out before Musk became their boss — that this somehow violated another clause of the agreement to “preserve substantially intact the material components of its current business organization.” This is also legally weak sauce.

Not surprisingly, Twitter’s board chair immediately announced this was going to court, which is what everyone expected:

So, the next stage of the fight will happen in Delaware Court of Chancery, and who the hell knows what happens then. Lots of lawyers are going to start eyeing yachts, however.

On the whole, it seems fairly blatantly obvious that all of Musk’s excuses here are pretextual, and plotted out by his lawyers to try to get him out of a deal that didn’t actually have an escape hatch. The question before the court, really, is whether or not it matters that he’s obviously trying to escape a deal that he agreed to.

Perhaps the most likely outcome is that the two sides will come to some sort of agreement — with the most probable outcome being that Musk agrees to pay some amount for Twitter to drop the case and walk away. The question though, is what number will satisfy both parties. While the agreement has a $1 billion breakup fee, that’s not really controlling here. There are going to be long drawn out discussions regarding how much Twitter and Musk will each agree to in order to just walk away. It may come down to somewhere around that $1 billion, but my guess is that if Twitter believes it has a strong case to force Musk to go forward with the full $44 billion, that it may be able to force him to pay substantially more.

Of course, it’s not just Twitter and its Board who are likely to go to court over this. I fully expect multiple shareholder lawsuits to be filed. And quickly. And not necessarily in the Chancery Court in Delaware. And some of those may get… messy for Musk, who basically jerked around the shareholders for months, and (it can be credibly argued) did serious damage to the company’s value in the interim.

All that said, there’s a separate question of what happens to Twitter.

Some — who were opposed to the Musk takeover — may look at this as the best scenario, if Musk walks away but has to hand Twitter a lot of cash, that could be useful to keep Twitter going. However, the way these things usually work is that Twitter is now seen as wounded and vulnerable. And, I can’t see Twitter’s current board (or major institutional investors) being able to leave Twitter alone as an independent company like this. As such, my guess would be that some third party now tries to swoop in and buy up the pieces.

It seems unlikely that either Google or (especially) Facebook would be allowed to do so by the DOJ or the FTC, but you could see some other large companies jumping into the fray — including Microsoft (who once wanted to buy TikTok and Discord, and already owns GitHub and LinkedIn) and Walmart (who also wanted TikTok, and still pretends that it wants to be a digital giant, rather than just a commerce giant). There are some more “out of left field” options as well. A large media company (Comcast? Disney?!?) could make a play for it. I think AT&T and Verizon have been chastened and shamed by their internet service failures, but who knows?

Either way, at some point in this process, it seems likely that Twitter’s ownership is going to change drastically.

Finally, for all the trolls and muck throwers who celebrated Musk “freeing” Twitter, well, they’ll just have to slum it up at Parler, Truth Social, Gettr, Gab, or wherever else they need to go.

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If It’s Impossible To Compete With Google, How Come New Search Engines Keep Launching?

from the the-internet-is-quite-the-dynamic-place dept

by Mike Masnick - July 8th @ 3:51pm

We’re talking a lot these days about competition and antitrust, and the narrative over the past few years is that four companies — Facebook, Apple, Amazon, and Google — have basically sewn up the entire internet market, and no new entrants can ever succeed. Of course, we keep seeing that argument challenged by reality. First off, for a while people were including Netflix in that list, but over the last few years, Netflix has been facing competition from all different directions and is now struggling. On the social media front, TikTok certainly showed that it’s possible for other entrants to become very big, very fast, even if Facebook wants to kill them. And, of course, basically every month now we hear about this or that new social network that is gaining ground, especially among younger generations who don’t trust Facebook.

But, on search, we’ve been told that there really can’t be a new entrant, since Google has such control over the market. Of course, Bing is out there, and DuckDuckGo has carved out a pretty healthy slice of the market.

Perhaps most interesting to me, however, is how I keep hearing about new entrants in the search market. Last fall, privacy-protecting browser Brave announced that it was launching its own search engine, for example. However, in the last few weeks I’ve heard about two other brand new search engines as well. First up, Russ Roberts interviewed former Google exec Sridhar Ramaswamy, who recently launched the new search engine Neeva, which appears to be a search engine with a freemium model that promises not just no tracking (a la DDG), but also no ads ever.

Last year, the company raised $40 million from two top VC firms, Sequoia and Greylock, which, again, goes against the narrative that VCs won’t invest in these spaces. In just four months since the site launched, it has half a million monthly active users. That’s pretty tiny, but it’s still a starting point.

Then, just about the same time I learned about Neeva, I learned about another new search engine, called Yep (I wonder how much that domain cost!). Yep was just launched a few weeks ago, after the big search engine optimization company Ahrefs spent an apparent $60 million building it.

With Yep, their attempted differentiator is (like so many others) no tracking of personal info, including search history, and then a weird “profit-sharing” model, in which they promise to share 90% of ad profits with content publishers. I’ll be honest: I don’t quite understand what that means or how it works. First off, it seems unlikely that they’ll be making any “profits” in the short run (and perhaps longer) so is this just a future promise?

And, second, how are they going to (1) keep track of which content providers they owe money to and how much, and (2) get hooked up with those content providers to give them the money. The company’s “hypothetical” is that they would fund a ton for Wikipedia:

"Let's say that the biggest search engine in the world makes $100B a year. Now, imagine if they gave $90B to content creators and publishers.

Wikipedia would probably earn a few billion dollars a year from its content. They'd be able to stop asking for donations and start paying the people who polish their articles a decent salary.

There would be no more need for paywalls and affiliate links, so publishers who've had to resort to chasing traffic with clickbait articles and filling their pages with ads would be able to get back to doing investigative pieces and quality analysis. A citizen journalist uncovering corruption on the side of a full-time job could get compensated without having to spend time trying to monetize content.

Again, this is not clear at all. How are they tracking that? How do they prevent gaming the system? Hell, they’re an SEO firm, they know that everyone tries to game search engines to get an indirect benefit. When you switch it to cold, hard cash, I imagine it’ll get that much worse. Perhaps the people at the company think their experience with SEO will help them spot the gamers, but it’s quite a challenge.

So, yes, neither of these may succeed. Both seem to have some pretty big challenges ahead. But I’m just generally fascinated by the idea that, despite the narrative about how it’s so impossible to build a search engine that there are “Venture Capital Kill Zones” where no VC would invest — and that includes search.

Yet, just here, within a week, I found out about approximately $100 million being spent on building two separate competing search engines, both with at least some plans to differentiate themselves in the market.

The internet is incredibly dynamic. There may be policy options for increasing competition, but it’s hard to argue that some companies have so dominated the field that no one even dares attempt to build competitors any more. They seem to be happening all around us.

Read More | 8 Comments

GAO’s Facial Recognition Testimony Doesn’t Explain Why Federal Agencies Aren’t Fixing Problems Reported A Year Ago

from the or-any-other-important-questions-really dept

by Tim Cushing - July 8th @ 1:30pm

The Government Accountability Office (GAO) recently submitted testimony [PDF] to the House Subcommittee on [takes deep breath] Investigations and Oversight and Committee on Science, Space, and Technology. Candace Wright, the GAO’s Director of Science, Technology Assessment, and Analytics explained the findings of previous GAO reports on facial recognition use by federal agencies.

Two of those reports were published last year. The first appeared in June and it showed federal agencies were doing nearly nothing to track employees’ use of facial recognition tech.

Thirteen federal agencies do not have awareness of what non-federal systems with facial recognition technology are used by employees. These agencies have therefore not fully assessed the potential risks of using these systems, such as risks related to privacy and accuracy. Most federal agencies that reported using non-federal systems did not own systems. Thus, employees were relying on systems owned by other entities, including non-federal entities, to support their operations.

Thirteen of the fourteen agencies examined by the GAO (a list that includes ICE, ATF, CBP, DEA, FBI, and the IRS) did not have any processes in place to track use of non-federal facial recognition tech.

This lack of internal oversight led directly to the behavior observed in the GAO’s second report, delivered in August. Either due to a lack of tech on-site or a desire to avoid what little internal oversight exists, federal agencies were often asking state and local agencies to do their dirty face rec work for them.

Unfortunately, this testimony — delivered nearly a year after the GAO’s released its findings — doesn’t provide any answers about this lack of internal oversight. Nor does it suggest things are moving forward on the internal oversight front as a result of its earlier investigations.

The status remains quo, it appears. About the only thing this testimony adds to the facial recognition discussion is the unfortunate fact that federal agencies feel zero compunction to better control use of this tech. It also adds a bit of trivia to the FRT mix by discussing a few little known uses of the tech by the government.

Four agencies—the Departments of Health and Human Services, Transportation, and Veterans Affairs, and NASA—reported using FRT as a tool to conduct other research. For example, Transportation reported that the Federal Railroad Administration used eye tracking to study alertness in train operators. Similarly, NASA also reported that it used eye tracking to conduct human factors research. In addition, the Department of Veterans Affairs reported it used eye tracking as part of a clinical research program that treats post-traumatic stress disorder in veterans.

Nor does the report explain why agencies surveyed under-reported their use of Clearview’s highly controversial facial recognition software. The information in the GAO’s June 2021 report is contradicted by public records obtained by Ryan Mac and Caroline Haskins of BuzzFeed, strongly suggesting five agencies flat out lied to the GAO.

In a 92-page report published by the Government Accountability Office on Tuesday, five agencies — the US Capitol Police, the US Probation Office, the Pentagon Force Protection Agency, Transportation Security Administration, and the Criminal Investigation Division at the Internal Revenue Service — said they didn't use Clearview AI between April 2018 and March 2020. This, however, contradicts internal Clearview data previously reviewed by BuzzFeed News.

This misleading — whether deliberate or not — goes unmentioned in the GAO’s testimony. And apparently no follow-up investigation was performed to see if agencies were doing anything to prevent the sort of thing seen here:

Officials from another agency initially told us that employees did not use non-federal systems; however, after conducting a poll, the agency learned that its employees had used a non-federal system to conduct more than 1,000 facial recognition searches.

A year down the road, and all the GAO can report is that three of the 13 agencies that had no internal tracking processes are now in the process of implementing “at least one” of the three recommendations the GAO handed out nearly 13 months ago following its first report.

Most of the testimony is handed over to discussing much quicker movements by federal agencies, i.e. the expanded deployment of questionable tech far ahead of mandated Privacy Impact Assessments or assessment efforts to track the reliability of the tech being deployed.

This testimony is incredibly underwhelming, to say the least. This is the Government Accountability Office doing the talking here. And it’s apparently unable to encourage more than a rounding error’s-worth of accountability gains. This leaves it to Congress, an entity that’s largely unconcerned with increasing government accountability because it might make things uncomfortable for them as they seek to extend four-year terms to de facto lifetime appointments.

The government has a facial recognition tech problem. And it’s going to get too big to handle quickly if findings like those reported by the GAO a year ago continue to be ignored by federal agencies and the oversight this testimony was delivered to. If the GAO can’t be bothered to ask tough questions from agencies that misled it months ago, it seems unlikely Congressional reps with multiple interests to serve (sometimes even those of their constituents!) are going to hold any agency accountable for playing fast and loose with questionable tech and citizens’ rights.

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Ben Smith’s New Media Venture Ably Demonstrates Why Platforming Authoritarian Propagandists Is A Lose-Lose Scenario

from the what-are-we-even-doing-here? dept

by Karl Bode - July 8th @ 12:17pm

Former Buzzfeed and New York Times reporter Ben Smith is poised to launch a new media company named Semafor on the back of $25 million in donations. To grab some attention for the venture’s looming launch, Semafor recently partnered with the Knight Foundation to launch the company’s first event: The Future of News: Trust and Polarization.

The event featured folks like former Wall Street Journal editor Gerald Seib, Al Jazeera host Femi Oke, Washington Post columnist Taylor Lorenz, and Politico’s John Harris. Absent from the event was any academic or outside expert actually versed in why trust in US news has deteriorated. In their place, Smith announced he’d be doing an exclusive interview with… Fox News’ Tucker Carlson.

The decision to platform a bigot and propagandist as part of an event on trust in news didn’t go over particularly well among people actually trying to, you know, restore trust in news. Such as media reform activist Nandini Jammi, who co-founded Sleeping Giants and Check My Ads (both campaigns to limit the power and wealth of COVID-denying, conspiracy-heavy, race-baiting Fox News):

The idea that this was being done to generate controversy and attention for a media venture, itself an act likely to reduce trust in news (at a conference purportedly about trust in news), was just skipped over. Also not considered: that one might just not give Carlson an even bigger bullhorn, instead giving that mental real estate to any number of media reform activists or academics laboring in obscurity.

After weeks of criticism and promises that Smith would hold Carlson’s feet to the fire, the interview arrived and Smith did… exactly none of that.

You can watch the interview itself here. Carlson, on webcam from his Manhattan or Hamptons closet (probably because his mansion kitchen wouldn’t project the desired man of the people persona) ran roughshod over Smith for a good half an hour, all to Carlson’s amusement.

At no point did Smith demonstrate real control over the interview, letting Carlson ramble on at length about how terrible middle-aged liberal women are, how he’s not actually a racist, how his critics in the press are the actual propagandists… without Smith seriously challenging the claims. Smith himself seems uncomfortable throughout, nervously fiddling with his notes in between lobbing softballs.

At one point, Smith repeats Carlson’s core claim that he’s “effectively just misunderstood.” At other points, attempted gotcha questions don’t land, such as asking if Carlson’s ever been discriminated against at work as a white Protestant. Almost every time Smith has an opportunity to press Carlson on outright lies, he either changes the subject or lets Carlson change the subject for him.

You then have to ask: what was the actual benefit in terms of the event’s premise? Ben’s promise, that he’d hold Carlson accountable with hard questions, never materialized. So the end result was little more than further amplification of Carlson’s falsehoods, the validation of Carlson’s role as a pseudo-journalist, and the perpetuation of the false idea that fascism is a valid platform that’s up for debate.

Before the event, Smith’s noble dedication to journalism was lauded by numerous folks in media, who agreed that you simply have to give a white supremacist authoritarian pretending to be a journalist an even bigger platform — at a trust in news conference. You just don’t have a choice!

Some folks in media suggested that turning down an interview with Carlson would be akin to turning down an interview with Hitler, and you just don’t do that. Others tried to make the point that because Carlson already has a massive nightly platform, there’s really no harm in elevating him further at an event specifically dedicated to solving sagging trust in U.S. journalism.

According to Smith and friends, platforming Carlson was the right call because it created the opportunity to challenge Carlson’s positions, be they agitating deep-rooted racial divisions for ratings, harming public health by amplifying COVID conspiracy theories and vaccine skepticism, or parroting the incoherent ramblings of the country’s surging, conspiratorial, and increasingly violent authoritarian right.

But at no point did an actual, competent challenge to Carlson’s falsehoods find its way to the stage.

Worse, that’s a half hour that could have been given any number of academics and experts with actual solutions to the problem. But actual media scholars well versed in why trust in US media is flailing weren’t just under-represented at the event, they were completely absent. It was a choice to embrace controversy over substance, ironically and inadvertently illustrating why trust in U.S. media is falling apart.

There are numerous reasons for eroded trust in US news. The death of quality local news opened the door wide to propagandists, foreign intelligence, and pink slime. Tone-deaf Luddite classism rules at major outlets like the New York Times. The shift toward an ad-based engagement model financially incentivized an entire industry to prioritize controversy and hysteria over boring substance and expertise.

Like so many others, Carlson has weaponized this dysfunction, feeding a steady diet of increasingly hysterical outrage drivel to partisans for clout. He’s perfected the act of media trolling at scale; making unhinged claims he knows will then be hate retweeted by outraged critics oblivious they’re being exploited as a human amplifier (a favorite pastime of Carlson predecessor Ann Coulter).

Platforming, debunking, or even debating fascist propagandists is a lose-lose scenario. You can’t defeat it with “gotcha” questions, because fascists have zero compulsion about lying, and no incentive to meet you in honest dialogue. Their goal is simple: to platform fascist ideology, to expose that ideology to as broad as audience as possible, and to frame fascism itself as a valid policy that’s up for debate.

The very second you’ve entered into this arrangement you’ve already lost.

Don’t try to debunk. Don’t try to debate. Don’t think you’re helping by dunking on Carlson with a hate retweet. Don’t get caught in a fight over whether an obvious fascist is a fascist. Instead find somebody under-represented who’s actually pushing real solutions and amplify them instead. Don’t feed the trolls.

That’s not to say fascists should be completely ignored and never challenged. But at some point, if democracy, trust in media, and foundational institutions are to be preserved, you have to enter into a savvy calculus about which signals are worth boosting, and which are harmful and exploitative. This was a trust in news event. Host actual experts with a good faith interest in solving the problem.

Somebody ignorant to modern discourse could easily walk away from the interview believing that Carlson, a millionaire frozen food empire heir turned opportunistic propagandist, is actually a brave, truth-telling journalist unfairly forced to hide in his closet by the powers that be. And that the real propagandists are anyone that would dare question Carlson’s noble intentions.

That we’re six-plus years into a massive surge in trumpist propaganda-soaked authoritarianism — and affluent, influential media leaders still don’t understand how any of this works — isn’t a great sign for what comes next. You win the game that fascists are trying to play by not playing it, giving the valuable mental real estate they hope to occupy to voices genuinely interested in real solutions and reform.

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More Than Two Thirds Of States Are Pushing Highly Controversial (And Likely Unconstitutional) Bills To Moderate Speech Online

from the the-moral-panic-to-end-all-moral-panics dept

by Mike Masnick - July 8th @ 10:44am

Over the last year and a half, we’ve had plenty of stories about how various state legislators are shoving each other aside to pass laws to try to regulate speech online. Of course, that’s generally not how they put it. They claim that they’re “regulating social media,” and making lots of (highly questionable) assumptions insisting that social media is somehow bad. And this is coming from both sides of the traditional political spectrum. Republicans are pushing bills to compel websites to host speech, while Democrats are pushing bills to compel websites to censor speech. And sometimes they team up to push horrible, dangerous, unconstitutional legislation “for the children.”

Over at Politco, Rebecca Kern has done an amazing job cataloging this rush by state legislators across the country to push these laws — almost all of which are likely unconstitutional. It’s depressing as anything, and in a few decades when we look back and talk about the incredibly ridiculous moral panic over social media, maps like these will be front and center:

You should read Kern’s full article, as it breaks the various bills down into four categories: banning censorship, reporting ‘hateful’ content, regulating algorithms, and mandating transparency — including interesting discussions on each category.

Of course, as you’ll note in the chart above, while Texas, Florida, and New York are the only states so far to pass such laws, the Florida and Texas ones are both on hold due to courts recognizing their problems. While New York’s only passed bill (it has more in the hopper) perhaps isn’t quite as bad as Florida’s and Texas’, it’s still awful and hopefully someone will challenge the constitutionality of it as well.

However, part of the problem is that for the apparently dwindling collection of people who still believe in free speech online, all of these bills (and many of the states listed above aren’t doing just one bill, but multiple crazy bills all at once) are creating a sort of distributed denial of service attack on free speech advocates.

We simply can’t respond to every crazy new bill in every crazy state legislature trying to regulate speech online. We (and here I mean literally us at the Copia Institute) are trying to help educate and explain to policymakers all across the country how dangerous and backwards most of these bills are. But we’re a tiny, tiny team with extremely little resources.

Yet, at the same time, many in the media (without noting that they compete with social media for ad dollars) seem to be cheering on many of these bills.

And, speaking of “free speech advocates,” it is beyond disappointing in Kern’s article to see the Knight First Amendment Institute, which I’ve worked with many times, and which I respect, quoted as supporting some of these clearly unconstitutional bills. There seems to have been an unfortunate shift in the Institute’s support for free speech over the last year or so. Rather than “protecting” the 1st Amendment, it has repeatedly staked out weird positions that seem designed to chip away at the 1st Amendment protections that are so important.

For example, they apparently see the ability to regulate algorithms as possibly not violating the 1st Amendment, which is crazy:

However, Wilkens, of the Knight First Amendment Institute, said that while the bill may "implicate the First Amendment, it doesn't mean that it violates the First Amendment." He said that while it's still up for interpretation, the legislation – if it became law – may "be held constitutional because the state's interest here in protecting young girls seems to be a very strong interest."

I’m not going to go deep on why this is disconnected from reality — both the idea that the bill being discussed (California’s AB 2048) would “protect young girls” (it wouldn’t) and that it might be constitutional (it obviously is not), but it’s distressing beyond belief that yet another institution that has taken in many millions of dollars (way more than Copia has received in nearly 25 years of existence) is now fighting against the 1st Amendment rather than protecting it.

There’s a war going on against online speech these days, and much of it is happening in state houses, where it is very, very difficult for the remaining advocates of online speech to be heard. And it’s not helping that others who claim to be supporters of free speech are out there actively undermining it.

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Daily Deal: The 2022 CompTIA, AWS, And Cisco Certification Prep Bundle

from the good-deals-on-cool-stuff dept

by Gretchen Heckmann - July 8th @ 10:39am

If you’re looking to get a job in IT or advance your career in the field, the 2022 CompTIA, AWS, And Cisco Certification Prep Bundle is an easy way to prepare for certifications that’ll help you stand out from the crowd. The courses included in this bundle cover a range of topics from cloud computing to network administration and include practice exams for CompTIA, AWS, and Cisco certifications. It’s on sale for $25.

Note: The Techdirt Deals Store is powered and curated by StackCommerce. A portion of all sales from Techdirt Deals helps support Techdirt. The products featured do not reflect endorsements by our editorial team.

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Judge Tosses Defamation Suit Brought By ShotSpotter Against Vice Media For Reporting On Its Shady Tactics

from the substantially-true,-mfers dept

by Tim Cushing - July 8th @ 9:31am

If you like your dystopia, you can keep your dystopia.

That’s where we are right now: dealing with a gunshot AI company that felt compelled to sue journalists for (accurately) reporting on things the company has done as well as offering their opinions on the company’s actions.

The company is ShotSpotter. Utilizing microphones and AI no defendant has been able to examine in court, ShotSpotter tells cops there have been shots in the (recorded) area and law enforcement stuff flows from there.

The problem with ShotSpotter is that it’s often inaccurate. And, according to some law enforcement agencies, it’s completely useless. On top of that, it has been caught altering gunshot records at the request of law enforcement investigators who perhaps find the original, unaltered reports aren’t helping them close cases or make arrests.

This seemingly accurate reporting has made ShotSpotter very angry. It has issued statements vehemently denying what’s been uncovered by public records requests and defense lawyers. But it did even more to Vice Media, home of tech reporting wing, Motherboard. It sued the website for defamation, claiming Vice’s reporting was full of lies, some of them actually and legally malicious.

ShotSpotter’s presumably high-powered lawyers dumped a 413-page complaint [PDF] into a Delaware court, because that’s where you file lawsuits when you’re a corporation seeking to sue another corporation and don’t want federal precedent on defamation lawsuits to get your case dismissed post haste.

Four hundred and thirteen pages. I hope ShotSpotter wasn’t paying by the word. Taxpayers may be obligated to front money for local court action, but they’re going to be out much less than ShotSpotter. The loss [PDF], handed to ShotSpotter by the Delaware Superior Court, runs only 28 pages. (h/t Justia, an invaluable source of legal documents and the only site that actually included the ruling, despite several others reporting on it.)

It seems ShotSpotter and its lawyers hoped to intimidate the court into a win with a massive wall of text. For all the redundant and pointless agitating, ShotSpotter’s anger is limited to 15 separate statements/allegations made by Vice and its reporters.

ShotSpotter seems stung the most by Vice/Motherboard’s allegation that it will alter reports at the request of law enforcement customers — something that converts evidence into something far more questionable: convenient contributions to the official narrative.

ShotSpotter alleged all of this was defamatory. First, the title of the Motherboard article:

“Police Are Telling ShotSpotter to Alter Evidence from Gunshot-Detecting AI”

This section heading:

“A pattern of alterations”

And this section of the article:

"Motherboard's review of court documents from the Williams case and other trials in Chicago and New York State, including testimony from ShotSpotter's favored expert witness, suggests that the company's analysts frequently modify alerts at the request of police departments – some of which appear to be grasping for evidence that supports their narrative of events."

To which the court responds, “Where’s the lie?” It starts by quoting expert testimony offered in a criminal case by ShotSpotter’s Senior Forensic Engineer, Paul Green.

Forensic examination of an incident is always done at a customer’s request, only at a customer’s request. It’s not something we do on a regular basis. In this case, ShotSpotter only detected the final two shots that you heard in the audio clip. An hour or so after the incident occurred, we were contacted by Chicago PD and asked to search for — essentially, search for additional audio clips. And this does happen on a semi-regular basis with all of our customers

Here’s Greene again, being cross-examined in another criminal case:

Q. Mr. Greene, I want to stop you right there. This note here denotes some employee at [ShotSpotter] changed the classification per the instruction of the customer?
A. Per the customer’s instruction, yes.
Q. Is that something that occurs in the regular course of business at [ShotSpotter]?
A. Yes, it is. It happens all the time.

Q. What happens if a customer calls and asks you to change a classification that has no link to the audio that you’re listening to?
A. We have refused customers [sic] to change classifications on incidents in the past. Typically, you know, we trust our law enforcement customers to be really upfront and honest with us . . .

ShotSpotter claimed it was defamatory to suggest the company “modified alerts at the request of the company.” The court says this obviously happens all the time, according to ShotSpotter’s own expert witnesses.

It is apparent, from Greene's testimony, that there is a pattern of alterations, and that these alterations sometimes come by request of police departments.

That’s the biggest, most obvious problem with ShotSpotter’s lawsuit. Adding to its problems is the fact that neither ShotSpotter or its presumably expensive legal representation can discern the difference between actionable assertions of fact and the hyperbole often present in social media posts.

It is clear to the Court that certain words used by Mr. Koebler are opinion. In Statement 12, Koebler tweets, "This is horrifying and nuts." In Statement 14, Koebler tweets, "Blatant corruption." These words are not actionable. They are no worse than a plaintiff being accused of being "shockingly racist" or accused of "blackmail." "[A] published statement that is 'pointed, exaggerated, and heavily laden with emotional rhetoric and moral outrage' is not defamatory."

And, if you believe (as ShotSpotter appears to) that being called “shockingly racist” or involved in “blackmail” is actionable, footnotes appended to both of those phrases cite precedent (from Delaware’s top court as well as the US Supreme Court) ruling otherwise.

As for any deliberate misleading by Vice reporter Jason Koebler, the court has this to say:

There is no misplacement or mistake of hyperlink. There is no chance that a trier of fact could understand a link to apply to one Statement and not another. Koebler links to the entire Article in the first tweet, and links to specific screenshots of the Article and relevant testimony in the next two. It would be clear to a reader that these three tweets should be read in conjunction with the Article, the Greene testimony, and the excerpt about the Simmons case.

As for the rest of the allegedly defamatory statements buried in ShotSpotter’s 413-page complaint, the court says there’s nothing actionable about those either.

The Court finds that the remainder of the proffered Statements are not defamatory.

More specifically: they’re substantially true, even if somewhat carelessly deployed:

There is substantial truth in the Williams and Simmons Statements. As demonstrated in the Complaint, the prosecutors' case and ensuing ShotSpotter evidence was withdrawn in Williams. While the Statement oversimplifies the sequence of events, it is admitted in the Complaint that prosecutors learned of the limitations of ShotSpotter technology, then "dropped the case." Also, the location was in fact changed for the gunshots. The Complaint acknowledges that the location change was due to ShotSpotter providing police with the geolocation of the park entrance, rather than the specific gunshot location. Further, these Statements are supported by and derived from a motion filed by William's public defender. The Article specifically states: "That night, 19 ShotSpotter sensors detected a percussive sound at 11:46 p.m. and determined the location to be 5700 South Lake Shore Drive—a mile away from the site where prosecutors say Williams committed the murder, according to a motion filed by Williams' public defender."

In Simmons, the Article states that a fifth shot disappeared. It bases this Statement on a New York court decision which overturned the defendant's conviction; the judge called it "troubling" that ShotSpotter evidence had disappeared. The full context provides that this happened after the evidence was already heard by a jury, then was later deleted per company protocol. While these Statements may lack the sufficient journalistic context, they are substantially true in their conveyance.

Vice wins. Unfortunately, it will be out its own costs for defending itself from this bogus lawsuit. Delaware’s anti-SLAPP law is extremely limited and doesn’t cover actions arising from one private entity’s complaints about another private entity’s statements. Once again, for the people in the back of a whole bunch of states: FEDERAL. ANTI. SLAPP. NOW.

The good news is ShotSpotter wasn’t able to sue Vice into silence. Reporting on the company’s questionable tactics will continue. And until the company is actually willing to force its law enforcement customers to accept what’s been detected by ShotSpotter devices (rather than run more searches and/or alter data), it’s just going to keep suffering similar losses in the court of public opinion, not to mention the literal courts where it presents its dubious evidence.

Read More | 8 Comments

Marco Rubio Pretends To Be A TikTok Privacy Champion, Despite Years Of Undermining U.S. Consumer Privacy

from the yeah-you're-not-helping dept

by Karl Bode - July 8th @ 6:33am

Most of the politicians you currently see in the headlines having an absolute embolism over TikTok privacy concerns, don’t seem to appreciate (or don’t want you to understand) how they helped create the problem they’re pretending to be so upset about.

The FCC’s Brendan Carr, for example, has been enjoying massive press coverage for weeks after he demanded Google and Apple ban TikTok from their app stores over privacy issues (a request he lacks the regulatory authority to even make). But Carr has historically opposed privacy reform or guidelines of any kind, creating the environment that opened the door to TikTok’s behavior.

Marco Rubio is another Senator eager to get his name in press lights as a privacy advocate, despite contributing to the problem he claims to be fixing. Rubio and Senator Mark Warner (himself a bit of a dumpster fire on numerous tech policy issues), this week, sent a letter to the FTC asking the agency to investigate TikTok privacy abuses:

"In light of repeated misrepresentations by TikTok concerning its data security, data processing, and corporate governance practices, we urge you to act promptly on this matter," the senators wrote FTC Chair Lina Khan.

This latest wave of TikTok moral panic began after Buzzfeed reported that U.S. user TikTok data was being shared with Chinese ByteDance executives overseas, in contrast to previous company promises. The big fear is that TikTok will share U.S. user data with the Chinese government. And the Buzzfeed revelations indicate that TikTok’s promises on privacy may not be worth much.

There are a few problems here. One, TikTok’s sloppy protection of U.S. user data, and flimsy promises as to how that data is handled, is in no way out of the ordinary for foreign and domestic companies.

Two, you could destroy TikTok today and the Chinese government could still buy this (and more) dataset(s) from a wide variety of dodgy adtech, telecoms, or data brokers. Why? Because we’ve created a global free for all data collection snoopvertising ecosystem with zero functional oversight and prioritized making money over consumer welfare. Repeatedly. For decades.

Marco Rubio has routinely voted against even modest privacy safeguards. Like he did in 2017 when he and the entirety of the GOP used the Congressional Review Act to demolish modest FCC broadband privacy safeguards after receiving thousands of dollars from telecom giants.

Most of the same folks now posturing on TikTok refuse to adequately fund or staff the FTC and FCC, and work pretty consistently to undermine oversight regulatory authority in high abuse sectors. These folks also oppose absolutely any state or federal privacy laws or reform.

They’ve actively cultivated an environment where there’s zero repercussions for being sloppy on U.S. consumer data, now posture on a single company’s abuse of an environment they created. And in many cases, like Carr and Rubio, they’ve had absolutely no comment on how this environment they created will now be exploited by authoritarians and radicals post Roe.

If you want to “fix” TikTok, you need to fix the broader ecosystem of lax privacy and security standards and penalties. Just freaking out about TikTok isn’t enough. Demanding the FTC (you’ve intentionally stripped of funding and authority over 30 years) investigate isn’t enough, as the best possible end result will almost certainly be a flimsy fine TikTok lawyers can tap dance over, under, and around.

Keep in mind, a lot of these folks are just posturing. In some cases, they’re part of an ongoing K Street campaign by Facebook to smear TikTok. In other instances, they just want to justify stealing TikTok and offloading it to U.S. companies (like Trump tried to do with Walmart and Oracle). In other instances, they’re just interested in agitating and animating the base with xenophobic moral panics to boost their political aspirations.

But for so many of these guys (Carr and Rubio in particular) you can’t look at their policy track record and honestly believe that consumer privacy reform has ever, for a single moment, been a genuine priority.

Read More | 20 Comments

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