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Transportation Weekly: Polestar CEO speaks, Tesla terminology, and a tribute

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Welcome back to Transportation Weekly; I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch . This is the fourth edition of our newsletter, a weekly jaunt into the wonderful world of transportation and how we (and our packages) move.

This week we chat with Polestar CEO Thomas Ingenlath, dig into Lyft’s S-1, take note of an emerging trend in AV development, and check out an experiment with paving. Oh, and how could we forget Tesla.

Never heard of TechCrunch’s Transportation Weekly? Catch up here, here and here. As I’ve written before, consider this a soft launch. Follow me on Twitter @kirstenkorosec to ensure you see it each week. (An email subscription is coming).

ONM …

There are OEMs in the automotive world. And here, (wait for it) there are ONMs — original news manufacturers. (Cymbal clash!) This is where investigative reporting, enterprise pieces and analysis on transportation lives.

This week, we’re featuring excerpts taken from a one-on-one interview with Polestar CEO Thomas Ingenlath.

On February 27, Volvo’s standalone electric performance brand Polestar introduced its first all-electric vehicle, a five-door fastback called the Polestar 2. The EV, which has a 78 kWh battery pack and can travel 275 miles (estimated EPA guidance) on a single charge, will be manufactured at a new factory in Chengdu, China. Other notable specs: The infotainment system will be powered by Android OS, Polestar is offering subscriptions to the vehicle, and production starts in 2020.

yellow-jacket-polestar

Here is what Ingenlath had to say to me about …

EV charging infrastructure

To be very unpolitical, I think it would be totally stupid if we were to aim to develop electric charging infrastructure on our own or for our brand specifically. If you join the electric market today, of course, you would see partnerships; that’s sensible thing to do. Car companies together are making a big effort in getting out a network of necessary charging stations along the highway. 

That’s what we’re doing; we’re teaming up and have the contracts being designed and soon signed.

On the company’s approach to automation 

The terminology is important for us. We very clearly put that into a different picture, we’re not talking about, and we clearly do not ever want to label it, an “autopilot.” The focus of this system is a very safe distance control, which brakes for you and accelerates for you, and of course, the lane keeping. This is not about developing an autopilot system, it is about giving your safety. And that’s where we don’t want to provoke people thinking that they have full rollout autopilot system there. But it is a system that helps you being safe and protected on the road.

I also reached out to Transportation Weekly readers and asked what they wanted to know and then sent some of those questions to Ingenlath.

TW Reader: How did it feel taking one of your personal styling elements – the C shaped rear lamps – from your previous brand over to Polestar?
Ingenlath: It’s an evolutionary process. Polestar naturally builds on its “mothers” DNA and as a new branch develops its own personality. Thor’s hammer, the rear light signature -—with each new model launch (Volvo and Polestar) those elements diverge into a brand specific species.
TW Reader: How much do you still get to do what you love, which is design?
Ingenlath: Being creative is still my main job, now applied on a broader scope — trying to lead a company with a creative and  brand building mindset. Still, I love the Fridays when I meet up with Robin and Max to review the models, sketches and new data. We really enjoy driving the design of both brands to new adventures.

Dig In

Tesla is finally going to offer customers a $35,000 Model 3. How the automaker is able to sell this electric vehicle at the long-awaited $35,000 price point is a big piece of that story — and one that some overlooked. In short, the company is blowing up its sales model and moving to an online only strategy. Tesla stores will close or be converted to “information centers” and retail employees will be laid off.

But this is not what we’re going to talk about today. Tesla has also brought back its so-called “full self-driving” feature, which was removed as an option on its website last year. Now it’s back. Owners can opt for Autopilot, which has automatic steering on highways and traffic-aware cruise control, or FSD.

FSD capability includes several features such as Navigate on Autopilot that is supposed to guide a car from a highway on-ramp to off-ramp, including navigating interchanges and making lane changes. FSD also includes Advanced Summon, Auto Lane Change, and Autopark. Later this year, the system will recognize and respond to traffic lights in more complex urban environments, Tesla says.

All of these features require the driver to be engaged (or ready to take over), yet it’s called “full self-driving.” Now Tesla has two controversially named automation features. (The other is Autopilot). As Andrew Hawkins at The Verge noted in his coverage, “experts are beginning to realize that the way we discuss, and how companies market, autonomy is significant.”

Which begs the obvious question, and one that I asked Musk during a conference call on Thursday. “Isn’t it a problem that you’re calling this full self-driving capability when you’re still going to require the driver to take control or be paying attention?” (I also wanted to ask a followup on his response, but the moderator moved onto the next reporter).

His response:

“We are very clear when you buy the car what is meant by full self driving. It means it’s feature complete, but feature complete requiring supervision.

As we get more — we really need billions of miles, if not maybe 10 billion sort of miles or kilometers on that order collectively from the fleet — then in our opinion probably at that point supervision is not required, but that will still be up to regulators to agree.

So we’re just very clear.  There’s really three steps: there’s being feature complete of full self driving that requires supervision, feature complete but not requiring supervision, and feature complete not requiring supervision and regulators agree.

In other Tesla news, the National Transportation Safety Board is investigating a crash, that at first glance seems to be similar to the fatal crash that killed Tesla owner Joshua Brown.

A little bird …

We hear a lot. But we’re not selfish. Let’s share.

blinky-cat-bird

It’s no secret that Pittsburgh is one of the hubs of autonomous vehicle development in the world. But what’s not so widely known — except for a group of government and company insiders — is that Mayor William Peduto is on the verge of issuing an executive order that will give more visibility into testing there. 

The city’s department of mobility and infrastructure is the central coordinator of this new executive order that aims to help guide testing and policy development there. The department is going to develop guidelines for AV testing, we’re told. And it appears that information on testing will be released to the public at least once a year.

Got a tip or overheard something in the world of transportation? Email me or send a direct message to @kirstenkorosec.

Deal of the week

Daimler and BMW are supposed to be competitors. And they are, except with mapping (both part of the HERE consortium), mobility services (car sharing, ride-sharing), and now the development of highly automated driving systems. The deal is notable because it illustrates a larger trend that has emerged as the AV industry hunkers down into the “trough of disillusionment.” And that’s consolidation. If 2016, was the year of splashy acquisitions, then 2019 is shaping up to be chockfull of alliances and failures (of some startups).

Also interesting to note, and one that will make some AV safety experts cringe, both companies are working on Level 3 driving automation, a designation by the SAE that means conditional driving automation in which multiple high levels of automation are available in certain conditions, but a human driver must be ready to take over. This level of automation is the most controversial because of the so-called “hand off” problem in which a human driver is expected to take control of the wheel in time.

Speaking of partnerships, another deal that got our attention this week involved New York-based mapping and data analytics startup Carmera and Toyota Research Institute-Advanced Development. TRI-AD is an autonomous drive unit started by Toyota with Denso and Aisin. TRI-AD’s mission is to take the research being done over at the Toyota Research Institute and turn its into a product.

The two companies are going to test a concept that will use cameras in Toyota test vehicles to collect data from downtown Tokyo and use it to create high definition maps for urban and surface roads.

TRI-AD considers this the first step towards its open software platform concept known as Automated Mapping Platform that will be used to support the scalability of highly automated driving, by combining data gathered from vehicles of participating companies to generate HD maps. AMP is new and has possible widespread implications at Toyota. And TRI-AD is full of A-listers, including CEO James Kuffner, who came from the Google self-driving project and Nikos Michalakis, who built Netflix’s cloud platform, and Mandali Khalesi, who was at HERE.

Read more on Khalesi and the Toyota’s open source ambitions here.

Other deals:

Snapshot

Snapshot this week is a bit untraditional. It’s literally a snapshot of myself and my grandmother, months before her 100th birthday. Her memorial service was held Saturday. She died at 101. She loved cars and fast ones, but not so much driving them. And every time I got a new press car, we’d hit the road and she’d encourage me to take the turns a bit faster.

She also loved road trips and in the 1920s, her father would drive the family on the mostly dirt roads from New Jersey to Vermont and even Canada. In her teens, she loved riding in the rumble seat, a feature found in a few vehicles at the time including the Ford Model A.

She was young at heart, until the very end. Next week, we’ll focus on the youngest drivers and one automotive startup that is targeting that demographic.

Tiny but mighty micromobility

Lyft’s S-1 lays out the risks associated with its micromobility business and its intent to continue relying on third parties to manufacture its bikes and scooters. Here’s a key nugget about adoption:

“While some major cities have widely adopted bike and scooter sharing, there can be no assurance that new markets we enter will accept, or existing markets will continue to accept, bike and scooter sharing, and even if they do, that we will be able to execute on our business strategy or that our related offerings will be successful in such markets. Even if we are able to successfully develop and implement our network of shared bikes and scooters, there may be heightened public skepticism of this nascent service offering.”

And another about seasonality:

“Our limited operating history makes it difficult for us to assess the exact nature or extent of the effects of seasonality on our network of shared bikes and scooters, however, we expect the demand for our bike and scooter rentals to decline over the winter season and increase during more temperate and dry seasons.”

Lyft, which bought bike-share company Motivate back in July, also released some data about its electric pedal-assist bikes this week, showing that the pedal assist bikes are, unsurprisingly, more popular than the traditional bikes. They also traveled longer distances and improved winter ridership numbers. Now, Lyft is gearing up to deploy 4,000 additional electric bikes to the Citi Bike system in New York City.

One more thing …

Google Maps has added a feature that lets users see Lime scooters, pedal bikes and e-bikes right from the transit tab in over 80 new cities around the world. Users can click the tab to find out if Lime vehicle is available, how long it’ll take to walk to the vehicle, an estimate of how much their ride could cost, along with total journey time and ETA.

Notable reads

If take the time to read anything this week (besides this newsletter), spend some time with Lyft’s S-1. The ride-hailing company’s prospectus mentions autonomous 109 times. In short, yeah, it’s something the company’s executives are thinking about and investing in.

Lyft says it has a two-pronged strategy to bring autonomous vehicles to market. The company encouraging developers of autonomous vehicle technology to use its open platform to get access to its network and enable their vehicles to fulfill rides on the Lyft platform. And Lyft is trying to build its own autonomous vehicle system at its confusingly named “Level 5 Engineering Center.”

  • The company’s primary investors are Rakuten with a 13 percent stake, GM with 7.8 percent, Fidelity with 7.7 percent, Andreessen Horowitz with 6.3 percent and Alphabet with 5.3 percent. GM and Alphabet have business units, GM Cruise and Waymo respectively, that are also developing AV technology.
  • Through Lyft’s partnership with AV systems developer and supplier Aptiv, people in Las Vegas have taken more than 35,000 rides in Aptiv autonomous vehicles with a safety driver since January 2018.
  • One of the “risks” the company lists is “a failure to detect a defect in our autonomous vehicles or our bikes or scooters”

Other quotable notables:

Check out the Pedestrian Traffic Fatalities by State report, a newly released report from Volvo Car USA and The Harris Poll called  The State of Electric Vehicles in America.

Testing and deployments

Again, deployments doesn’t always mean the latest autonomous vehicle pilot.

On Saturday, Sidewalk Labs hosted its Open Sidewalk event in Toronto. This is part of Sidewalk Toronto, a joint effort by Waterfront Toronto and Alphabet’s Sidewalk Labs to create a “mixed-use, complete community” on Toronto’s Eastern Waterfront

The idea of this event was to share ideas and prototypes for making outdoor public space the “social default year-round.” One such prototype “hexagonal paving” got our attention because of its use case for traffic control and pedestrian and bicyclist safety. (Pictured below)

These individual precast concrete slabs are movable and permeable, can light up and give off heat. The idea is that these hexagonal-shaped slabs and be used to clear snow and ice in trouble spots and light up to warn drivers and pedestrians of changes to the street use or to illuminate an area for public uses or even designate bike lanes and hazard zones. And because they’re permeable they can be used to absorb stormwater or melted snow and guide it to underground stormwater management systems.

Sidewalk Labs tell me that the pavers have “plug and play” holes, which allow things like bike racks, bollards, and sign posts to be inserted. Sidewalk Labs initially built these with wood, and the new prototype is the next iteration, featuring modules built from concrete.

On our radar

There is a lot of transportation-related activity this month.

The Geneva Motor Show: Press days are March 5 and March 6. Expect concept, prototype and production electric vehicles from Audi, Honda, Kia, Peugeot, Pininfarina, Polestar, Spanish car company Hispano Suiza, and Volkswagen.

SXSW in Austin: TechCrunch will be at SXSW this coming week. Here’s where I’ll be.

  • 2 p.m. to 6:30 p.m. March 9 at the Empire Garage for the Smart Mobility Summit, an annual event put on by Wards Intelligence and C3 Group. The Autonocast, the podcast I co-host with Alex Roy and Ed Niedermeyer, will also be on hand.
  • 9:30 a.m. to 10:30 a.m. March 12 at the JW Marriott. The Autonocast and founding general partner of Trucks VC, Reilly Brennan will hold a SXSW podcast panel on automated vehicle terminology and other stuff.
  • 3:30 p.m over at the Hilton Austin Downtown, I’ll be moderating a panel Re-inventing the Wheel: Own, Rent, Share, Subscribe. Sherrill Kaplan with Zipcar, Amber Quist, with Silvercar and Russell Lemmer with Dealerware will join me.
  • TechCrunch is also hosting a SXSW party from 1 pm to 4 pm Sunday, March 10, 615 Red River St., that will feature musical guest Elderbrook. RSVP here. 

Self Racing Cars

Finally, I’ve been in contact with Joshua Schachter who puts on the annual Self Racing Car event, which will be held March 23 and March 24 at Thunderhill Raceway near Willows, California.

There is still room for participants to test or demo their autonomous vehicles, drive train innovation, simulation, software, teleoperation, and sensors. Hobbyists are welcome. Sign up to participate or drop them a line at contact@selfracingcars.com.

Thanks for reading. There might be content you like or something you hate. Feel free to reach out to me at kirsten.korosec@techcrunch.com to share those thoughts, opinions or tips. 

Nos vemos la próxima vez.

Read more: https://techcrunch.com/2019/03/03/transportation-weekly-polestar-ceo-speaks-tesla-terminology-and-a-tribute/

Facebook will shut down its spyware VPN app Onavo

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Facebook will end its unpaid market research programs and proactively take its Onavo VPN app off the Google Play store in the wake of backlash following TechCrunch’s investigation about Onavo code being used in a Facebook Research app the sucked up data about teens. The Onavo Protect app will eventually shut down, and will immediately cease pulling in data from users for market research, though it will continue operating as a Virtual Private Network in the short-term to allow users to find a replacement.

Facebook has also ceased to recruit new users for the Facebook Research app that still runs on Android but was forced off of iOS by Apple after we reported that it violated Apple’s Enterprise Certificate program for employee-only apps. Existing Facebook Research app studies will continue to run, though.

With the suspicions about tech giants and looming regulation leading to more intense scrutiny of privacy practices, Facebook has decided that giving users a utility like a VPN in exchange for quietly examining their app usage and mobile browsing data isn’t a wise strategy. Instead, it will focus on paid programs where users explicitly understand what privacy they’re giving up for direct financial compensation.

Onavo billed itself as a way to “limit apps from using background data” and “use a secure VPN network for your personal info” but also noted it would collect the “Time you spend using apps, mobile and Wi-Fi data you use per app, the websites you visit, and your country, device and network type.” A Facebook spokesperson confirmed the change and provided this statement: “Market research helps companies build better products for people. We are shifting our focus to reward-based market research which means we’re going to end the Onavo program.”

Facebook acquired Onavo in 2013 for a reported $200 million to use its VPN app to gather data about what people were doing on their phones. That data revealed WhatsApp was sending over twice as many messages per day as Messenger, BuzzFeed’s Ryan Mac and Charlie Warzel reported, convincing Facebook to pay a steep sum of $19 billion to buy WhatsApp. Facebook went on to frame Onavo as a way for users to reduce their data usage, block dangerous websites, keep their traffic safe from snooping — while Facebook itself was analyzing that traffic. The insights helped it discover new trends in mobile usage, keep an eye on competitors and figure out what features or apps to copy. Cloning became core to Facebook’s product strategy over the past years, with Instagram’s version of Snapchat Stories growing larger than the original.

But last year, privacy concerns led Apple to push Facebook to remove the Onavo VPN app from the App Store, though it continued running on Google Play. But Facebook quietly repurposed Onavo code for use in its Facebook Research app that TechCrunch found was paying users in the U.S. and India ages 13 to 35 up to $20 in gift cards per month to give it VPN and root network access to spy on all their mobile data.

Facebook ran the program in secret, obscured by intermediary beta testing services like Betabound and Applause. It only informed users it recruited with ads on Instagram, Snapchat and elsewhere that they were joining a Facebook Research program after they’d begun signup and signed non-disclosure agreements. A Facebook spokesperson claimed in a statement that “there was nothing ‘secret’ about this”, yet it had threatened legal action if users publicly discussed the Research program.

But the biggest problem for Facebook ended up being that its Research app abused Apple’s Enterprise Certificate program meant for employee-only apps to distribute the app outside the company. That led Apple to ban the Research app from iOS and invalidate Facebook’s certificate. This shut down Facebook’s internal iOS collaboration tools, pre-launch test versions of its popular apps and even its lunch menu and shuttle schedule to break for 30 hours, causing chaos at the company’s offices.

To preempt any more scandals around Onavo and the Facebook Research app and avoid Google stepping in to forcibly block the apps, Facebook is now taking Onavo off the Play Store and stopping recruitment of Research testers. That’s a surprising voluntary move that perhaps shows Facebook is finally getting in tune with the public perception of its shady actions. The company has repeatedly misread how users would react to its product launches and privacy invasions, leading to near constant gaffes and an unending news cycle chronicling its blunders.

Without Onavo, Facebook loses a powerful method of market research, and its future initiatives here will come at a higher price. Facebook has run tons of focus groups, surveys and other user feedback programs over the past decade to learn where it could improve or what innovations it could co-opt. And with more apps recently turning on encryption, Onavo likely started learning less about their usage. But given how cloning plus acquisitions like WhatsApp and Instagram have been vital to Facebook’s success, it’s likely worth paying out more gift cards and more tightly monitoring its research practices. Otherwise Facebook could miss the next big thing that might disrupt it.

Hopefully Facebook will be less clandestine with its future market research programs. It should be upfront about its involvement, make certain that users understand what data they’re giving up, stop researching teens or at the very least verify the consent of their parents and avoid slurping up sensitive information or data about a user’s unwitting friends. For a company that depends on people to trust it with their content, it has a long way to go win back our confidence.

Facebook pays teens to install VPN that spies on them

Read more: https://techcrunch.com/2019/02/21/facebook-removes-onavo/

Google expands partnership with Founder Gym to support underrepresented founders

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Google for Startups has expanded a partnership with startup training program Founder Gym to better serve underrepresented founders through a new scholarship program.

The program typically charges $396 to participate, but thanks to this partnership with Google for Startups, Google will cover the costs for select scholarship recipients to participate in the six-week program. This partnership is an extension of a pilot program that started last March.

“Google for Startups took an early bet on Founder Gym when we were less than six months old, and as any founder knows, you never forget the first people to say ‘yes’ to your dream,” Mandela Schumacher-Hodge Dixon said in a statement.

“Our team at Founder Gym has used that early vote of confidence to help fuel our efforts to train a groundbreaking number of founders around the world in our inaugural year.”

Founder Gym, co-founded by Mandela Schumacher-Hodge Dixon and Gabriela Zamudio,* unveiled its online platform in November 2017 to support and train underrepresented founders building tech startups.

“We are deeply committed to supporting the growth and success of underrepresented founders,” Google for Startups VP Lisa Gevelber said in a statement. “At Google we know that innovation can come from anywhere, but the resources needed to succeed are not evenly distributed. Founder Gym is truly moving the needle in this space – their unique program delivers the tangible resources necessary to level the playing field for founders and help them grow their businesses.”

Instead of describing it as a school, bootcamp or incubator, Founder Gym describes itself as a topical, six-week training program that covers topics like fundraising, pitching, user growth and problem validation. In Founder Gym’s first 12 months of operation, its cohort has collectively raised $35 million in funding.

“As we enter year two of this journey, we couldn’t be more excited to expand our partnership with Google for Startups, an organization that has a long history of supporting the entrepreneur’s journey,” Schumacher-Hodge Dixon said. “There is no doubt in my mind, this partnership will help us achieve our mission of developing the next generation of great innovators and leaders.”

Update 3:14 pm: This story has been edited to reflect the fact that Zamudio is no longer at Founder Gym. 

Read more: https://techcrunch.com/2019/02/12/google-expands-partnership-with-founder-gym-to-support-underrepresented-founders/

Google takes Hire, its G Suite recruitment platform, to its first global markets, UK and Canada

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The recruitment market is big business — worth some $554 billion annually according to the most recent report from the World Employment Confederation. In the tech world, that translates into a big opportunity to build tools to make a recruiter’s work easier, faster and more likely of success in finding the right people for the job. Now Google is stepping up its own efforts in the space: today it is expanding Hire, its G Suite-based recruitment management platform, to the UK and Canada, its first international markets outside the US.

Google is a somewhat late entrant into the market, launching Hire only in 2017 with the basic ability to use apps like Gmail, Calendar, Spreadsheets and Google Voice to help people manage and track candidates through the recruiting process and doing so by integrating with third-party job boards. In the interim, it has supercharged the service with bells and whistles that draw on the company’s formidable IP in areas like AI and search.

These tools provide robotic process automation-style aids to take away some of the more repetitive tasks around admin.

“Recruiters want time to talk to candidates but they don’t want to sit in systems clicking things,” said Dmitri Krakovsky, the VP leads Hire for Google. “We give time back by automating a lot of functionality.” They also sift out needles in haystacks of applicants and surface interesting “lookalikes” who didn’t quite make the cut (or take the job) so that they can be targeted for future opportunities.

And — naturally — while Hire links up with third-party job boards via services like eQuest to bring inbound people into the system, it also provides seamless integration with Jobs by Google, Google’s own vertical search effort that is taking on the traditional job board by letting people look for opportunities with natural language queries in Google’s basic search window. 

Krakovsky said that the first international launches in Canada and the UK made sense because of the lack of language barrier between them and the US. The UK was key for another reason, too: it gave Google the chance to tweak the product to comply with GDPR, he said, for future launches.

While markets like the UK and US represent some of the very biggest for recruitment services globally, it’s a long tail opportunity, and over time, the ambition will be to take Hire global, positioning it as a key rival against the likes of Taleo, LinkedIn, Jobvite, Zoho, SmartRecruiter and many others in the area of applicant sourcing and tracking.

Currently, Hire ranks only at number 23 among the top 100 applicant tracking systems globally, according to research from OnGig, but it also singles it out for its potential because it is, after all, Google. For now, Krakovsky said it’s not taking on large enterprises or even tiny mom-and-pop shops, but the very large opportunity of between 10 and a couple of thousand employees.

The bigger opportunity for Google is on a couple of levels. First, it sells Hire as a paid product that helps bolster the company’s wider offering of Google Cloud Platform software and services. These prices range from $100/month to $400/month depending on company size (and you work directly with Google on pricing if your organization is over 100 employees). Second, it bolsters the company’s wider ambitions in recruitment, which also include the API-based Cloud Talent Solutions and its vertical search job boards. It’s a quiet but huge strategy, considering the size of the market that is being tackled.

Google’s supercharging of Hire with AI and taking it international highlights another point. One of the biggest meta-trends in recruitment has been a push to try to hire with more diversity in mind, not just to bring fairness to the process, but to infuse businesses with different ways of thinking and catering to different audiences.

While AI is something that can definitely speed up certain processes, it has also been shown to be a potential cesspool of bias based on what is fed into it. One particularly messy example of that, in fact, came from an attempt by Amazon to build an AI-based recruitment tool, which it eventually had to shut down.

Google is well aware of that and has been keeping it in mind when building and expanding Hire particularly to new territories, which in themselves are exercises in handling diversity for AI systems.

Krakovsky noted that one example of how Google has been building more “understanding” AI is in its searches for veterans, who can look for jobs using their own jargon for expertise, which automatically gets translated into other skills in the way they might be described by employers outside the military.

That’s for sourcing jobs, of course. The key for the tech world, if it wants to build products that will have international staying power to upset the existing “hire”archy (sorry), will be to bring that kind of levelling to every aspect of the recruiting process over time.

Those at the top are not sitting back, either: just yesterday Jobvite (ranked fifth largest ATS tracking platform) announced a funding round of $200 million and three acquisitions.

Read more: https://techcrunch.com/2019/02/12/google-takes-hire-its-g-suite-recruitment-platform-to-its-first-global-markets-uk-and-canada/

Is Europe closing in on an antitrust fix for surveillance technologists?

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The German Federal Cartel Office’s decision to order Facebook to change how it processes users’ personal data this week is a sign the antitrust tide could at last be turning against platform power.

One European Commission source we spoke to, who was commenting in a personal capacity, described it as “clearly pioneering” and “a big deal”, even without Facebook being fined a dime.

The FCO’s decision instead bans the social network from linking user data across different platforms it owns, unless it gains people’s consent (nor can it make use of its services contingent on such consent). Facebook is also prohibited from gathering and linking data on users from third party websites, such as via its tracking pixels and social plugins.

The order is not yet in force, and Facebook is appealing, but should it come into force the social network faces being de facto shrunk by having its platforms siloed at the data level.

To comply with the order Facebook would have to ask users to freely consent to being data-mined — which the company does not do at present.

Yes, Facebook could still manipulate the outcome it wants from users but doing so would open it to further challenge under EU data protection law, as its current approach to consent is already being challenged.

The EU’s updated privacy framework, GDPR, requires consent to be specific, informed and freely given. That standard supports challenges to Facebook’s (still fixed) entry ‘price’ to its social services. To play you still have to agree to hand over your personal data so it can sell your attention to advertisers. But legal experts contend that’s neither privacy by design nor default.

The only ‘alternative’ Facebook offers is to tell users they can delete their account. Not that doing so would stop the company from tracking you around the rest of the mainstream web anyway. Facebook’s tracking infrastructure is also embedded across the wider Internet so it profiles non-users too.

EU data protection regulators are still investigating a very large number of consent-related GDPR complaints.

But the German FCO, which said it liaised with privacy authorities during its investigation of Facebook’s data-gathering, has dubbed this type of behavior “exploitative abuse”, having also deemed the social service to hold a monopoly position in the German market.

So there are now two lines of legal attack — antitrust and privacy law — threatening Facebook (and indeed other adtech companies’) surveillance-based business model across Europe.

A year ago the German antitrust authority also announced a probe of the online advertising sector, responding to concerns about a lack of transparency in the market. Its work here is by no means done.

Data limits

The lack of a big flashy fine attached to the German FCO’s order against Facebook makes this week’s story less of a major headline than recent European Commission antitrust fines handed to Google — such as the record-breaking $5BN penalty issued last summer for anticompetitive behaviour linked to the Android mobile platform.

But the decision is arguably just as, if not more, significant, because of the structural remedies being ordered upon Facebook. These remedies have been likened to an internal break-up of the company — with enforced internal separation of its multiple platform products at the data level.

This of course runs counter to (ad) platform giants’ preferred trajectory, which has long been to tear modesty walls down; pool user data from multiple internal (and indeed external sources), in defiance of the notion of informed consent; and mine all that personal (and sensitive) stuff to build identity-linked profiles to train algorithms that predict (and, some contend, manipulate) individual behavior.

Because if you can predict what a person is going to do you can choose which advert to serve to increase the chance they’ll click. (Or as Mark Zuckerberg puts it: ‘Senator, we run ads.’)

This means that a regulatory intervention that interferes with an ad tech giant’s ability to pool and process personal data starts to look really interesting. Because a Facebook that can’t join data dots across its sprawling social empire — or indeed across the mainstream web — wouldn’t be such a massive giant in terms of data insights. And nor, therefore, surveillance oversight.

Each of its platforms would be forced to be a more discrete (and, well, discreet) kind of business.

Competing against data-siloed platforms with a common owner — instead of a single interlinked mega-surveillance-network — also starts to sound almost possible. It suggests a playing field that’s reset, if not entirely levelled.

(Whereas, in the case of Android, the European Commission did not order any specific remedies — allowing Google to come up with ‘fixes’ itself; and so to shape the most self-serving ‘fix’ it can think of.)

Meanwhile, just look at where Facebook is now aiming to get to: A technical unification of the backend of its different social products.

Such a merger would collapse even more walls and fully enmesh platforms that started life as entirely separate products before were folded into Facebook’s empire (also, let’s not forget, via surveillance-informed acquisitions).

Seized cache of Facebook docs raise competition and consent questions

Facebook’s plan to unify its products on a single backend platform looks very much like an attempt to throw up technical barriers to antitrust hammers. It’s at least harder to imagine breaking up a company if its multiple, separate products are merged onto one unified backend which functions to cross and combine data streams.

Set against Facebook’s sudden desire to technically unify its full-flush of dominant social networks (Facebook Messenger; Instagram; WhatsApp) is a rising drum-beat of calls for competition-based scrutiny of tech giants.

This has been building for years, as the market power — and even democracy-denting potential — of surveillance capitalism’s data giants has telescoped into view.

Calls to break up tech giants no longer carry a suggestive punch. Regulators are routinely asked whether it’s time. As the European Commission’s competition chief, Margrethe Vestager, was when she handed down Google’s latest massive antitrust fine last summer.

Her response then was that she wasn’t sure breaking Google up is the right answer — preferring to try remedies that might allow competitors to have a go, while also emphasizing the importance of legislating to ensure “transparency and fairness in the business to platform relationship”.

But it’s interesting that the idea of breaking up tech giants now plays so well as political theatre, suggesting that wildly successful consumer technology companies — which have long dined out on shiny convenience-based marketing claims, made ever so saccharine sweet via the lure of ‘free’ services — have lost a big chunk of their populist pull, dogged as they have been by so many scandals.

From terrorist content and hate speech, to election interference, child exploitation, bullying, abuse. There’s also the matter of how they arrange their tax affairs.

The public perception of tech giants has matured as the ‘costs’ of their ‘free’ services have scaled into view. The upstarts have also become the establishment. People see not a new generation of ‘cuddly capitalists’ but another bunch of multinationals; highly polished but remote money-making machines that take rather more than they give back to the societies they feed off.

Google’s trick of naming each Android iteration after a different sweet treat makes for an interesting parallel to the (also now shifting) public perceptions around sugar, following closer attention to health concerns. What does its sickly sweetness mask? And after the sugar tax, we now have politicians calling for a social media levy.

Just this week the deputy leader of the main opposition party in the UK called for setting up a standalone Internet regulatory with the power to break up tech monopolies.

Talking about breaking up well-oiled, wealth-concentration machines is being seen as a populist vote winner. And companies that political leaders used to flatter and seek out for PR opportunities find themselves treated as political punchbags; Called to attend awkward grilling by hard-grafting committees, or taken to vicious task verbally at the highest profile public podia. (Though some non-democratic heads of state are still keen to press tech giant flesh.)

In Europe, Facebook’s repeat snubs of the UK parliament’s requests last year for Zuckerberg to face policymakers’ questions certainly did not go unnoticed.

Zuckerberg’s empty chair at the DCMS committee has become both a symbol of the company’s failure to accept wider societal responsibility for its products, and an indication of market failure; the CEO so powerful he doesn’t feel answerable to anyone; neither his most vulnerable users nor their elected representatives. Hence UK politicians on both sides of the aisle making political capital by talking about cutting tech giants down to size.

The political fallout from the Cambridge Analytica scandal looks far from done.

Quite how a UK regulator could successfully swing a regulatory hammer to break up a global Internet giant such as Facebook which is headquartered in the U.S. is another matter. But policymakers have already crossed the rubicon of public opinion and are relishing talking up having a go.

That represents a sea-change vs the neoliberal consensus that allowed competition regulators to sit on their hands for more than a decade as technology upstarts quietly hoovered up people’s data and bagged rivals, and basically went about transforming themselves from highly scalable startups into market-distorting giants with Internet-scale data-nets to snag users and buy or block competing ideas.

Zuckerberg owns or clones most of the “8 social apps” he cites as competition

The political spirit looks willing to go there, and now the mechanism for breaking platforms’ distorting hold on markets may also be shaping up.

The traditional antitrust remedy of breaking a company along its business lines still looks unwieldy when faced with the blistering pace of digital technology. The problem is delivering such a fix fast enough that the business hasn’t already reconfigured to route around the reset. 

Commission antitrust decisions on the tech beat have stepped up impressively in pace on Vestager’s watch. Yet it still feels like watching paper pushers wading through treacle to try and catch a sprinter. (And Europe hasn’t gone so far as trying to impose a platform break up.) 

But the German FCO decision against Facebook hints at an alternative way forward for regulating the dominance of digital monopolies: Structural remedies that focus on controlling access to data which can be relatively swiftly configured and applied.

Vestager, whose term as EC competition chief may be coming to its end this year (even if other Commission roles remain in potential and tantalizing contention), has championed this idea herself.

In an interview on BBC Radio 4’s Today program in December she poured cold water on the stock question about breaking tech giants up — saying instead the Commission could look at how larger firms got access to data and resources as a means of limiting their power. Which is exactly what the German FCO has done in its order to Facebook. 

At the same time, Europe’s updated data protection framework has gained the most attention for the size of the financial penalties that can be issued for major compliance breaches. But the regulation also gives data watchdogs the power to limit or ban processing. And that power could similarly be used to reshape a rights-eroding business model or snuff out such business entirely.

The merging of privacy and antitrust concerns is really just a reflection of the complexity of the challenge regulators now face trying to rein in digital monopolies. But they’re tooling up to meet that challenge.

Speaking in an interview with TechCrunch last fall, Europe’s data protection supervisor, Giovanni Buttarelli, told us the bloc’s privacy regulators are moving towards more joint working with antitrust agencies to respond to platform power. “Europe would like to speak with one voice, not only within data protection but by approaching this issue of digital dividend, monopolies in a better way — not per sectors,” he said. “But first joint enforcement and better co-operation is key.”

The German FCO’s decision represents tangible evidence of the kind of regulatory co-operation that could — finally — crack down on tech giants.

Blogging in support of the decision this week, Buttarelli asserted: “It is not necessary for competition authorities to enforce other areas of law; rather they need simply to identity where the most powerful undertakings are setting a bad example and damaging the interests of consumers.  Data protection authorities are able to assist in this assessment.”

He also had a prediction of his own for surveillance technologists, warning: “This case is the tip of the iceberg — all companies in the digital information ecosystem that rely on tracking, profiling and targeting should be on notice.”

So perhaps, at long last, the regulators have figured out how to move fast and break things.

Read more: https://techcrunch.com/2019/02/09/is-europe-closing-in-on-an-antitrust-fix-for-surveillance-technologists/