[Editor Charlie sez: Congress needs to get rid of the safe harbors for the special people, including the retroactive safe harbor against songwriters in the Music Modernization Act that no one talks about.]
LOS ANGELES, CA / WASHINGTON, DC – April 19, 2018 – Today, the American Federation of Musicians, the Content Creators Coalition, CreativeFuture, and the Independent Film & Television Alliance, four organizations representing over 240,000 members and 670 companies, sent letters to the Senate Committee on the Judiciary; the Senate Committee on Commerce, Science, and Transportation; and the House Energy and Commerce Committee. These committees held hearings with Facebook CEO Mark Zuckerberg on April 10 and 11, 2018, where Facebook’s founder was questioned on the company’s accountability and responsibility for what appears on their platform.
The letters, which will be entered into the official record for both hearings, ask Congress to ensure “that Facebook, Google, Twitter, and other internet platforms … (1) take meaningful action to protect their users’ data, (2) take appropriate responsibility for the integrity of the news and information on their platforms, and (3) prevent the distribution of unlawful and harmful content through their channels.”
“Facebook, Google and other internet platforms post massive amounts of content often without the consent of the people who create this content and without compensating the creators. Congress should take strong action to ensure that musicians and other creators are appropriately compensated and credited when their work is used by these very profitable corporations,” said American Federation of Musicians International President Ray Hair.
“The same dominant internet platforms that have successfully connected billions of people across the globe and mapped the world refuse to take action to stop the real harms their platforms have enabled. They boast of their technological know-how and then claim to be powerless to police fake news, human trafficking, and unlicensed content on their platforms,” said the Content Creators Coalition. “While we are encouraged by the recent hearings, Congress needs to do more to hold these platform monopolies accountable.”
CreativeFuture CEO Ruth Vitale said: “Silicon Valley touts their size when bragging about their contribution to the American economy, but when they want to fend off regulation, they quickly retreat to ‘just two guys working in the garage…’ and claim that rules will ‘stifle innovation.’
“Big Tech has made it to the top of American industry when it comes to profitability. So, this is the time when they should take responsibility. They must do what they can to stop crimes from happening on their turf.”
Jean Prewitt, President & CEO of the Independent Film & Television Alliance, added: “The internet should create important opportunities for expanded distribution, new audiences, and new revenue streams for independent creatives. That promise, however, can only be realized if online platforms and services, like Facebook, Google, Twitter and others, respect the personal and economic rights of consumers and creators and work cooperatively to ensure that those principles are observed throughout the ecosystem. We appreciate Congress taking the first steps to evaluate the extent to which corporate and legislative action may be needed to achieve that result.”
[Editor Charlie sez: When they write the book on the Internet it will be the biggest income transfer of all time, from Macy’s to Amazon, from Tower to Spotify, from Sony to Apple, from competition to monopoly. It’s not new money or a new economy, it’s just the old economy going into as few new pockets as possible. There will be a magic show at 0930.]
Despite what you may have heard, hard work in your chosen trade is absolutely the stupidest way to join the billionaires club. In Silicon Valley, the world’s most brilliant MBAs and IT professionals discovered a shortcut to fabulous riches. Ambitious Ivy Leaguers who once flocked to Wall Street are now packing up and heading west. The Valley’s startup founders, investors, equity-holding executives and fee-taking middlemen have thrived above all. Inspired by their success, my idea was to move to Silicon Valley, pitch a startup and become obscenely rich. I left home with some homemade business cards showing my new email address, firstname.lastname@example.org, and a bunch of half-baked ideas….
Unfortunately, the techie hustlers can be a little too clever for their own good – and ours. With decades of unwavering support from the military-industrial complex, Congress and Wall Street, the pallid princelings of Silicon Valley rewrote the rules of the global economy in their favour. The public, fooled as it was by the tech industry’s slick marketing and lulled by the novelty and convenience of its gadgetry, might be forgiven for missing some early warning signs. (Remember when the Google guys used to rhapsodise about beaming the internet – with the attendant targeted advertising – directly into people’s brains? It doesn’t sound so far-fetched and quirky now, does it?)
If we are feeling generous, the same retrospective clemency could even be shown to politicians who mistook Silicon Valley for just another well-heeled lobby looking for favours, and to the reporters who were suckered by the rapid rise of “revolutionary” companies such as Theranos and Uber. But the builders of our digital dystopia – the tech titans themselves, and their armies of engineers – have no such excuses. They will talk about the mistakes they have made. They will express regret for their oversights and make a show of contrition. Don’t be fooled.
The dark side of Big Tech, which many consumers are only beginning to come to grips with, is not some byproduct of California-style “conscious capitalism” – an unfortunate misstep in an otherwise heroic effort to “change the world”. Profit-hunger, philistinism and misanthropy are and always have been at the core of the enterprise. The new breed of Silicon Valley billionaires knew exactly what they were doing. The plan was to take all the money and run – to Mars, if necessary.
A federal judge in California has ruled that Facebook can be sued in a class-action lawsuit brought by users in Illinois who say the social network improperly used facial recognition technology on their uploaded photographs.
The plaintiffs are three Illinois Facebook users who sued under a state law that says a private entity such as Facebook can’t collect and store a person’s biometric facial information without their written consent. The law, known as the Biometric Information Privacy Act, also says that information that uniquely identifies an individual is, in essence, their property. The law prohibits a private entity from selling, leasing, trading or otherwise profiting from a person’s biometric information.
U.S. District Judge James Donato ruled that the lawsuit can proceed as a class action representing potentially millions of Facebook users in Illinois. The judge is based in San Francisco where the case had been moved at Facebook’s request.
Given that Cerf is essentially Willy Wonka if he were in the information business, including the fact that Mountain View may well be home to an army of Oompa Loompa coders and hackers, I immediately took notice — ready to devour the latest thinking of the man guiding us to, or from, the Singularity. After all, he was about to own up to the irrational exuberance surrounding the development of technology without having considered how it might be used, and how an economy based on achieving optimization of attention would end up distorting public discourse and the economy in ways that were, how can I say this politely…less than optimal in advancing the stated core goals that Cerf and the other fathers of the Internet had espoused. The very title promised a less evangelical approach to internet governance — one that recognized that there was a “dark side” of the internet. And stated so boldly. 2018 as the year when the dark forces undermining the potential of the internet were defeated.
[And Apple leads Spotify in another metric, too. Apple has not filed a single “address unknown” mass NOI–not one. Spotify has filed millions.]
[An internal Apple] memo, obtained by Variety, [contained] the latest subscription milestone achieved by the three-year-old service. Apple Music now counts more than 40 million paid subscribers in 115 countries. With some 8 million auditioning the service via free trials, the service is gaining ground on its competitors — namely Spotify, which went public on April 3 — at a monthly growth rate of 5% (versus Spotify’s 2%), per a recent report in WSJ.
[Editor Charlie sez: Scott Cleland takes an excellent deep dive into the “leechonomics” of the safe harbors afforded to the special people who are members of the Internet Association and the Digital Media Association. This corporate welfare was most recently replicated in the punitive Music Modernization Act retroactive safe harbor bolstering profits from copyright infringement for the special people which passed the House Judiciary Committee on the same day that the Congress cut back the CDA 230 safe harbor for the same special companies and cut their profits from sex trafficking.]
This post introduces a new white paper here with a first-of-its-kind, cost-estimation model of the cumulative hidden public costs of U.S. Internet industrial policy* entitled: “Internet Platform Corporate Welfare and Leechonomics.” *U.S. Internet-first, industrial policy in the 1996 Telecom Act, effectively exempted only Internet companies from: all U.S. communications law, regulation, and public responsibilities; normal non-communications Federal/State regulation; and normal civil liability for what happens via their platforms and business models.
Nutshell Summary: Sweeping Government exemptions and immunities from risks and costs overwhelmingly favor zero-sum, parasitic policy arbitrage and corporate welfare, which perversely fosters unproductive “leechonomics.” U.S. Internet policy most incents platform business that maximizes arbitrage spreads, i.e. taking maximal societal risk that un-immunized competitors can’t take, where the benefits can be capitalized by platforms, and the costs socialized to the public (>$1.5T), because the government has only exempted and immunized platforms from normal accountability and responsibility for consumer welfare.
Last month, CreativeFuture asked you, our followers, what you thought about platform responsibility. Little did we know that, in the meantime, the issue would start taking over the front pages of our newspapers and websites!
In a nutshell, the issue is whether Google, Facebook, and their Silicon Valley peers should take responsibility for the ways their platforms are used to violate our laws and harm society.
Even before the House and Senate passed landmark legislation to demand accountability from the tech giants and even before Facebook’s Cambridge Analytica mess exploded, we asked your views on a few simple questions that came down to one thing: do you believe that Google and Facebook should be more responsible?
The answer, overwhelmingly, was that you do – and you had a lot to add in response. Here are just some of your comments:
“The organizations who own these platforms make enormous profits. They have a responsibility to make sure the platforms are not being used to harm others.”
“They have the greatest ability to do so. And a moral responsibility. Just because it’s a newer technology doesn’t exempt them.”
“Because if they are able to control it, and I believe that they can, then they should be held accountable and responsible if they don’t.”
“They are providing the service that is being used for these malicious acts. They are responsible! They need to find a solution and be held accountable!”
“Violations of the law should be prosecuted. To avoid prosecution, they should take proactive steps to prevent violations.”
“They created these platforms, they should be responsible for them. They are beyond wealthy from them and can afford to police them. U.S. laws should apply everywhere in the U.S., including [the internet]!”
“Times change, services change, service providers change. Rules must keep up with changes.”
“Hostile foreign governments are using internet social platforms to publish untrue propaganda in order to destabilize our nation … if they can’t or won’t [monitor their platforms], they should be heavily fined and shut down. It is their responsibility for doing business in this country.”
“Responsibility is part of having a business.”
“[Google and Facebook] are no different from any other corporation which has the responsibility not to enable breaking the law. They are complicit and just a guilty as those breaking the law.”
“I can’t believe we even have to ask this question. I am sick and tired of corporations bearing no responsibility for the effects of their services on people. If a crime is occurring and the corporation looks the other way, that cannot be allowed any longer.”
“They don’t want the responsibility of accountability because complying would eat into profits with no returns. So, it will NEVER happen unless it is legislated.”
“The internet has become perhaps the single most important source of information and communication in the world. It cannot just rake in profits and not be responsible for what they have created.”
This week, on April 10 and 11, Facebook’s CEO Mark Zuckerberg will testify twice before Congress on the issues facing his company, and Silicon Valley generally. We expect that Zuckerberg will be very well prepped by his army of lawyers. We anticipate that he will try to reassure Congress that Facebook is doing all it can to (1) protect the privacy of its users; (2) prevent foreign influence on its advertising networks; and (3) stop rampant violations of the law from being carried out on their platform.
But Congress should not settle for head-pats and platitudes. They need to ask some hard and direct questions. We hope they will include the following…