The Dutch antitrust authority has found that Apple’s rules requiring software developers to use its in-app payment system are anti-competitive and ordered it to make changes, four people familiar with the matter said, in the latest regulatory setback for the iPhone maker.

Apple’s app-store payment policies, in particular its requirement that app developers exclusively use its payment system where commissions range between 15% and 30%, have long drawn complaints from developers.

[…]

The Netherlands’ Authority for Consumers and Markets (ACM) last month informed the U.S. technology giant of its decision, making it the first antitrust regulator to make a finding the company has abused market power in the app store, though Apple is facing challenges in multiple countries.

ACM has not levied a fine against Apple, but demanded changes to the in-app payment system, the people said. The decision has not been seen by Reuters.

An ACM spokesperson declined to comment, saying that the matter is currently under legal review. The regulator has previously said it expects to publish its decision this year.

[…]

Source: EXCLUSIVE Dutch watchdog finds Apple app store payment rules anti-competitive – sources | Reuters

Game-making platform and fledgling metaverse Roblox made the news yesterday as the focus of a New York Times report about a ‘90s era tax cut that’s spun out of control. Originally created to foster investment in small businesses, the Qualified Small Business Stock, or Q.S.B.S., exemption has transformed into a way for ultra-wealthy businesses to avoid paying taxes on huge amounts of profits.

I’d say it seemed like a good idea at the time, but it really wasn’t. Launched in 1993, the Qualified Small Business Stock exemption was presented as a means to get more people investing in start-ups by shielding some of a company’s profits from taxation. Originally the exemption meant an investor would be shielded from paying taxes on half of profits up to 10 million dollars, but that was eventually changed to exempt the entire 10 million

[…]

the U.S. tax system for voting into being a loophole-laden exemption that would eventually be so abused that participating in it would be considered a right-of-passage for Silicon Valley’s ultra-wealthy. The problem with the Q.S.B.S. exemption is that it can be cloned. All it takes is gifting stock to friends and family. Though they haven’t invested in the company, they nevertheless still qualify for the exemption, so you can ensure that large chunks of money stay within close orbit of your control without needing to pay taxes on said cash.

According to financial reports and the New York Times’ sources, Roblox founder David Baszucki has been able to multiply the exemption 12 times over, gifting stock to his wife, his four children, and various other relatives. In the fall of 2020, months before Roblox went public, Baszucki’s mother-in-law started giving away shares to relatives. Since they were gifted, those shares also qualified for the exemption. In March of 2021, Roblox went public, valued at 45 billion.

While this all sounds horrible and super-cheaty, there’s nothing at all illegal about this practice. It has a name, stacking, but is also known as peanut-buttering

[…]

 

Source: Roblox Saves Millions Taking Advantage Of A Shocking Tax Dodge

Norton antivirus’s inbuilt cryptominer has re-entered the public consciousness after a random Twitter bod expressed annoyance at how difficult it is to uninstall.

The addition of Ncrypt.exe, Norton 360’s signed cryptocurrency-mining binary, to installations of Norton antivirus isn’t new – but it seems to have taken the non-techie world a few months to realise what’s going on.

Back in June, NortonLifeLock, owner of the unloved PC antivirus product, declared it was offering Ethereum mining as part of its antivirus suite. NortonLifeLock’s pitch, as we reported, was that people dabbling in cryptocurrency mining probably weren’t paying attention to security – so what better way than to take up a cryptocurrency miner than installing one from a trusted consumer security brand?

In return for you installing their cryptominer on your home PC, NortonLifeLock skims off a mere 15 per cent of whatever digital currency you generate. While this compares well to the 100 per cent takings that criminals covertly deploying cryptominers help themselves to, some might say it’s a bit excessive for minimal effort on Norton’s part.

[…]

“If you have turned on Norton Crypto, but you no longer want to use the feature, you can disable it through your Norton Crypto dashboard,” says the FAQ on Norton’s website.

Uninstalling it altogether takes a bit more persistence, it appears, with users needing to disable Norton Product Tamper Protection (intended to protect the antivirus product from being disabled or deleted by malware) before going through the usual Windows uninstallation steps.

Norton isn’t alone: last year a maker of Wi-Fi routers offered to mine cryptocurrency on users’ devices if they supplied connectivity to the general public.

[…]

Source: Yes, Norton 360 has a built in cryptominer. Deletion is easy • The Register

Google and Facebook have come a little unstuck in the cookie department as French watchdog Commission Nationale de l’Informatique et des Libertés (CNIL) slapped the pair with a €150m and €60m fine respectively.

The CNIL kicked off its investigations after receiving complaints regarding the way cookies can be refused on facebook.com, youtube.com and google.fr. The crux of the matter is that while there is a button to permit immediate acceptance of cookies, there is not the equivalent to refuse them as easily. “Several clicks are required to refuse all cookies, against a single one to accept them,” explained the CNIL.

“The restricted committee,” it went on, “considered that this process affects the freedom of consent: since, on the internet, the user expects to be able to quickly consult a website, the fact that they cannot refuse the cookies as easily as they can accept them influences their choice in favor of consent. This constitutes an infringement of Article 82 of the French Data Protection Act.”

[…]

Source: France fines Meta, Google: Cookies must be easier to reject • The Register

Electric- and hydrogen-powered truck startup Nikola has agreed to a $125 million settlement over charges that it defrauded investors after misleading them about its products, technical advances and financial prospects.

Nikola violated the antifraud and disclosure control provisions of the federal securities laws, the Securities and Exchange Commission said Tuesday.

In July the founder and one-time chair of Nikola, Trevor Milton, was freed on $100 million bail after pleading not guilty to charges alleging he lied about the company.

The U.S. Attorney’s Office in Manhattan, New York, charged Milton, 39, with two counts of securities fraud and wire fraud. He resigned as chairman in September.

The SEC said in its order that Milton embarked on a public-relations campaign aimed at inflating and maintaining Nikola’s stock price before the company had produced a vehicle.

The SEC also found that Milton misled investors about Nikola’s technological advancements, in-house production capabilities, hydrogen production, truck reservations and orders, and financial outlook. In addition, it found that Nikola misled investors by misrepresenting or omitting information about the refueling time of its prototype vehicles, as well as the economic risks and benefits associated with a potential partnership with General Motors.

[…]

Source: EV startup Nikola settles with U.S. for $125 million | The Seattle Times

Also see: Nikola Admits Prototype Was Rolling Downhill In Promo Video

[…]

According to court documents, Ishii switched the transfer address for a Sony Life transaction to use a Silvergate Bank account under his control..

Ishii later converted the stolen funds into more than 3879 bitcoins via A Coinbase set up to automatically transfer all added funds to an offline cryptocurrency cold wallet with a Bitcoin address of bc1q7rhc02dvhmlfu8smywr9mayhdph85jlpf6paqu.

After converting the money to cryptocurrency, Ishii also tried persuading his supervisor and several Sony Life executives not to help investigators by emailing them a ransom note typed in English and Japanese.

“If you accept the settlement, we will return the funds back. If you are going to file criminal charges, it will be impossible to recover the funds,” the note read.

“We might go down behind all of this, but one thing is for sure, you are going to be right there next to us. We strongly recommend to stop communicate (sic) with any third parties including law enforcement.”

Cryptocurrency seized following FBI investigation

However, on December 1, following an investigation in collaboration with Japanese law enforcement authorities, the FBI seized the 3879.16242937 BTC in Ishii’s wallet after obtaining the private key, which made it possible to transfer all the bitcoins to the FBI’s bitcoin wallet.

“Sony and Citibank immediately contacted and cooperated with law enforcement as soon as the theft was detected, and the FBI worked in partnership with both to locate the funds,” explained FBI Special Agent in Charge Suzanne Turner.

“Second, the FBI’s footprint internationally through our Legal Attaché offices and the pre-existing relationships we have established in foreign countries – in this instance with Japan – enabled law enforcement to coordinate and identify the subject.”

Tokyo’s Metropolitan Police Department arrested the 32-year-old Ishii the same day and criminally charged him on suspicion of obtaining $154 million dollars following fraudulent money transfers from mid-May.

[…]

Source: US returns $154 Million in bitcoins stolen by Sony employee

First, come up with a catchy name for a cryptocurrency project. Next, convince the credulous to buy associated digital tokens. Finally, abandon the project and keep investors’ funds.

This “rug pulling” scam lacks sophistication but evidently it works. According to Chainalysis, a blockchain data biz, separating cryptocoin buyers from their money in this manner has become particularly popular in the DeFi (decentralized finance) ecosystem and has contributed to a scam surge.

In a post previewing the company’s 2022 Crypto Crime Report, Chainalysis said scams constituted the largest form of cryptocurrency-based crime, as measured by transaction volume. Cryptocurrency investors – if that’s the right term – lost over $7.7bn worth of digital whatever in 2021.

That’s up 81 per cent from 2020, but 2020, amid the COVID-19 pandemic, was an unusual year. This year was not quite as bad as 2019, which was close to $10bn worth of scams. But there were more scams overall (3,300 in 2021, up from 2,052 in 2020), albeit with shorter lifespans (~70 days in 2021, compared to ~192 in 2020 and to around ~2,369 in 2013).

Take-the-money-and-run gambits should not to be confused with losses attributable to security shortcomings at DeFi services that let hackers steal funds, like the recent theft of some $120m in tokens from BadgerDAO or the $31m taken from MonoX. That’s a separate dumpster fire.

Source: Cryptocurrency ‘rug pulls’ cheated investors out of ‘$8bn’ • The Register

[…]

new research detailed in The Wall Street Journal suggests its inequality problems are worse than the United States’ disgraceful performance under the dollar. An incredible feat considering income inequality in 2020 America was the highest of all G7 nations according to data from Organization for Economic Cooperation and Development viewed by Pew Research.

That illustration, of a vanishingly small bitcoin financial elite, was revealed in a new National Bureau of Economic Research study written by professors from the MIT Sloan School of Management and London School of Economics. It found that of the 19 million bitcoin currently in circulation, just 0.01% of buyers control around 27% of the total supply. That 27% percent figure amounts to around 5 million bitcoins, which in turn comes out to about $232 billion USD. The top 1% wealthiest U.S. individuals, by comparison, control “only” about a third of all the country’s wealth, the Journal notes.

The professors conducted their research by, for the first time, mapping out and analyzing every single bitcoin transaction over its 13 years of existence.

[…]

there have been experts and academics sounding their own alarm bells around bitcoin’s potential inequality-inducing tendencies. In an interview with CNBC Cornell University, economics professor and author of The Future of Money Eswar Prasad granted cryptocurrencies may make digital payments more accessible but said that doesn’t guarantee any lessening of inequality.

“Because of existing inequalities in digital access and financial literacy, they [cryptocurrencies] could end up worsening inequality,

[…]

Despite all of this, mentions of “decentralization” and “democracy” and “independence” in relation to crypto abound as a new wave of Web3 investors and enthusiasts spend millions locking in NFTs and forming DAOs to make collective purchases.

Source: Bitcoin’s Inequality Problem Is Putting the Dollar to Shame

Jeff Bezos’ rocket company, Blue Origin, became the subject of a federal review this fall after a group of 21 current and former employees co-signed an essay that raised serious questions about the safety of the company’s rockets — including the rocket making headlines for flying Bezos and other celebrities to space.

But that review was hamstrung by a lack of legal protections for whistleblowers in the commercial spaceflight industry, according to emails from Federal Aviation Administration investigators that were obtained by CNN Business.

The FAA also confirmed in a statement Friday that its Blue Origin review is now closed, saying the “FAA investigated the safety allegations made against Blue Origin’s human spaceflight program” and “found no specific safety issues.”

The emails obtained by CNN Business, however, reveal that investigators were not able to speak with any of the engineers who signed the letter anonymously. Investigators also were not able to go to Blue Origin and ask for documents or interviews with current employees or management, according to the FAA.

The situation highlights how commercial spaceflight companies like Blue Origin are operating in a regulatory bubble, insulated from much of the scrutiny other industries are put under. There are no federal whistleblower statues that would protect employees in the commercial space industry if they aid FAA investigators, according to the agency.

[…]

Source: FAA says lack of federal whistleblower protections is ‘enormous factor’ hindering Blue Origin safety review – CNN

Italy’s antitrust authority (AGCM) has fined Amazon €1.13 billion ($1.28 billion) for “abuse of dominant position,” the second penalty it has imposed on Amazon over the last month. Amazon holds a position of “absolute dominance” in the Italian brokerage services market, “which has allowed it to promote its own logistics service, called Fulfillment by Amazon (FBA),” the authority wrote in a (Google translated) press release.

According to the AGCM, companies must use Amazon’s FBA service if they want access to key benefits like the Prime label, which in turn allows them to participate in Black Friday sales and other key events. “Amazon has thus prevented third-party sellers from associating the Prime label with offers not managed with FBA,” it said.

The authority said access to those functions are “crucial” for seller success. It also noted that third-party sellers using FBA are not subject to the same stringent performance requirements as non-FBA sellers. As such, they’re less likely to be suspended from the platform if they fail to meet certain goals. Finally, it noted that sellers using Amazon’s logistics services are discouraged from offering their products on other online platforms, at least to the same extent they do on Amazon.

[…]

Source: Italian regulator fines Amazon $1.28 billion for abusing its market dominance | Engadget

[…]

Spotify took down the work of hundreds of comedians, including big names like John Mulaney, Jim Gaffigan, and Kevin Hart, the Wall Street Journal reported on Saturday. Mulaney, Gaffigan, Hart, and other comedians are represented by Spoken Giants, a global rights company that’s leading the fight to get radio and digital platforms, such as Spotify, SiriusXM, Pandora, and YouTube, to pay comedians royalty payments on the copyright for their written work.

According to the outlet, the streaming giant been in negotiations with Spoken Giants but couldn’t reach an agreement. On Thanksgiving, Spotify informed Spoken Giants that would pull all work by comedians represented by the organization until they could come to an understanding.

[…]

“In music, songwriter royalties are a very basic revenue stream, so this is not an unfamiliar concept and our work is based on established precedents and clear copyright language,” King said. “With this take-down, individual comedians are now being penalized for collectively requesting the same compensation songwriters receive.”

[…]

Source: Spotify Pulls Content of Comedians Fighting to Get Royalties

The 2022 World Inequality Report, a huge undertaking coordinated by economic and inequality experts Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, was the product of four years of research and produced an unprecedented data set on just how wealth is distributed.

“The world is marked by a very high level of income inequality and an extreme level of wealth inequality,” the authors wrote.

The data serves as a complete rebuke of the trickle-down economic theory, which posits that cutting taxes on the rich will “trickle down” to those below, with the cuts eventually benefiting everyone. In America, trickle-down was exemplified by President Ronald Reagan’s tax slashes. It’s a theory that persists today, even though most research has shown that 50 years of tax cuts benefits the wealthy and worsens inequality.

[…]

Piketty, who was Zucman’s doctoral adviser, wrote the tome “Capital in the 21st Century” which used an unprecedented data set going back to the French Revolution to expose how centuries of growing wealth inequality was a feature of capitalism, not a bug. The World Inequality Report was his effort to do the same for recent history.

They argue in the new report that the last two decades of wealth data show that “inequality is a political choice, not an inevitability.”

For instance, when it comes to wealth, which accounts for the values of assets people hold, researchers found that the “poorest half of the global population barely owns any wealth at all.” That bottom half owns just 2% of total wealth. That means that the top half of the world holds 98% of the world’s wealth, and that gets even more concentrated the wealthier you get.

Indeed, the richest 10% of the world’s population hold 76%, or two-thirds of all wealth. That means the 517 million people who make up the top hold vastly more than the 2.5 billion who make up the bottom. The world’s policy choices have led to wealth trickling up rather than down.

[…]

Billionaires now hold a 3% share of global wealth, up from 1% in 1995

The report notes that “2020 marked the steepest increase in global billionaires’ share of wealth on record.” Broadly, the number of billionaires rose to a record-number in 2020, with Wealth-X finding that there are now over 3,000 members of the three-comma club.

[…]

Source: Huge 20-Year Study Shows Trickle-Down Is a Myth, Inequality Rampant

Ministers have agreed a secrecy clause in any dispute with the drugs manufacturer Pfizer over Britain’s Covid vaccine supply. Large portions of the government’s contracts with the company over the supply of 189m vaccine doses have been redacted and any arbitration proceedings will be kept secret.

The revelation comes as Pfizer is accused by a former senior US health official of “war profiteering’’ during the pandemic. In a Channel 4 Dispatches investigation to be broadcast this week, Tom Frieden, who was director of the US Centers for Disease Control and Prevention under Barack Obama, said: “If you’re just focusing on maximising your profits and you’re a vaccine manufacturer … you are war profiteering.”

Zain Rizvi, research director at Public Citizen, a US consumer advocacy organisation which has examined Pfizer’s global vaccine contracts, said: “There is a wall of secrecy surrounding these contracts and it’s unacceptable, particularly in a public health crisis.”

Rizvi said the UK needed to explain why it had agreed to secret arbitration proceedings. He said: “It’s the only high-income country we have seen that has agreed to this provision. It allows pharmaceutical companies to bypass domestic legal processes.

“The UK government has allowed the drug firms to call the shots. How did we end up in a situation where a handful of drug firms were able to exert so much control over the most powerful governments in the world? It points to a broken system.”

Pfizer has won plaudits for its vaccine delivery programme, but the US multinational faces growing scrutiny over the scale of its profits and the proportion of doses it has delivered to low-income countries.

While AstraZeneca agreed to sell its vaccine at cost during the pandemic, Pfizer wanted to secure its profits. The Pfizer/BioNTech vaccine, which now has the brand name Comirnaty, will be one of the most lucrative drugs in pharmaceutical history.

The Channel 4 investigation reveals analysis by one biological engineering expert claiming the Pfizer vaccine costs just 76p to manufacture for each shot. It is reportedly being sold for £22 a dose to the UK government.

The estimated manufacturing costs do not include research, distribution and other costs, but Pfizer says its profit margin as a percentage before tax are in the “high-20s”. Pfizer expects to deliver 2.3bn vaccines this year with predicted revenues of $36bn (£26.3bn).

A report last month by the People’s Vaccine Alliance, a coalition of organisations including aid charities, said Pfizer and other drug firms have sold the majority of doses to rich countries, leaving low-income countries “out in the cold” . Only 2% of people in low-income countries had been fully vaccinated against coronavirus. Drug firms should suspend intellectual property rights for Covid-19 vaccines, tests, treatments and other medical tools.

Pfizer has faced increased scrutiny allegations of excessive global profits after its partner, the biotechnology company BioNTech, announced in September 2020 it was to receive up to €375m (£320m) from the German government to fund vaccine development.

Anna Marriott, Oxfam’s health policy manager said: “It is deplorable that billions of people around the world are being denied vaccines so that pharmaceutical companies can make obscene profits. Given that public investment was crucial to vaccine development, it’s incomprehensible that pharma monopolies are being prioritised over people’s lives.”

[…]

Source: ‘Wall of secrecy’ in Pfizer contracts as company accused of profiteering | UK news | The Guardian

As rumored, the UK’s Competition and Markets Authority (CMA) has ordered Meta (Facebook) to sell Giphy, saying the deal “could harm social media users and UK advertisers.” It found that the deal would boost Meta’s already prodigious market power by limiting other platforms’ access to Giphy GIFs, “driving more traffic to Facebook owned sites — Facebook, WhatsApp and Instagram.”

The CMA said that Meta’s sites dominated social media user time to the tune of 73 percent and that it could further muscle out rivals like TikTok, Twitter and Snapchat by leveraging Giphy. It added that prior to the merger, Giphy launched “innovative advertising services” used by brands like Dunkin’ Donuts and Pepsi that it could have brought to the UK.

“Facebook terminated Giphy’s advertising services at the time of the merger, removing an important source of potential competition,” the regulator wrote. “The CMA considers this particularly concerning given that Facebook controls nearly half of the £7 billion display advertising market in the UK.”

[…]

Source: UK competition regulator orders Meta to sell Giphy | Engadget

We’ve heard the fable of “the self-made billionaire” a thousand times: some unrecognized genius toiling away in a suburban garage stumbles upon The Next Big Thing, thereby single-handedly revolutionizing their industry and becoming insanely rich in the process — all while comfortably ignoring the fact that they’d received $300,000 in seed funding from their already rich, politically-connected parents to do so.

In The Warehouse: Workers and Robots at Amazon, Alessandro Delfanti, associate professor at the University of Toronto and author of Biohackers: The Politics of Open Science, deftly examines the dichotomy between Amazon’s public personas and its union-busting, worker-surveilling behavior in fulfillment centers around the world — and how it leverages cutting edge technologies to keep its employees’ collective noses to the grindstone, pissing in water bottles. In the excerpt below, Delfanti examines the way in which our current batch of digital robber barons lean on the classic redemption myth to launder their images into that of wonderkids deserving of unabashed praise.

[…]

Source: Hitting the Books: How Amazon laundered the ‘myth of the founder’ into a business empire | Engadget

South Korean has again imposed new regulations on app stores, this time with a regime that will see operators fined up to two per cent of revenue if they force their proprietary in-app payment systems on developers.

“Considering that certain payment methods compulsory acts are serious illegal acts of app market operators, an enforcement ordinance has been prepared that imposes a fine of two per cent of sales and one per cent of sales for delayed screening or deletion,” the Korea Communications Commission (KCC), yesterday announced in a (Korean language) canned statement.

The new regulation follows the September 2021 introduction of the country’s Telecommunications Business Act, which prevents tech giants from restricting payment options on their platforms – either to pay for apps or for in-app purchases. The Act also prevents the likes of Google, Apple and others from taking a cut of in-app purchases facilitated by third-party services.

[….]

Source: Big tech fined if they force their own in-app payment system • The Register

Come on, EU, US, where are you guys?!

The north-German state of Schleswig-Holstein plans to switch to open source software, including LibreOffice, in its administration and schools.

In doing so, the state wants to reduce its dependence on proprietary software, and eventually end it altogether. By the end of 2026, Microsoft Office is to be replaced by LibreOffice on all 25,000 computers used by civil servants and employees (including teachers), and the Windows operating system is to be replaced by GNU/Linux.

The necessary steps for this are specified in the planning of the Schleswig-Holstein state parliament (German), as digital minister Jan Philipp Albrecht explains in an interview with c’t (also German – Google Translate version here).

Lothar Becker and Thorsten Behrens from The Documentation Foundation, the non-profit entity behind LibreOffice, were invited to a meeting with those responsible (photos below). The focus was on cloud solutions, integration with LibreOffice and other systems, and video conferencing tools.

[…]

Source: German state planning to switch 25,000 PCs to LibreOffice

MIT’s Technology Review shares data from a Facebook-run tool called CrowdTangle. It shows that by 2018 in the nation of Myanmar (population: 53 million), ” All the engagement had instead gone to fake news and clickbait websites.

“In a country where Facebook is synonymous with the internet, the low-grade content overwhelmed other information sources.” [T]he sheer volume of fake news and clickbait acted like fuel on the flames of already dangerously high ethnic and religious tensions. It shifted public opinion and escalated the conflict, which ultimately led to the death of 10,000 Rohingya, by conservative estimates, and the displacement of 700,000 more. In 2018, a United Nations investigation determined that the violence against the Rohingya constituted a genocide and that Facebook had played a “determining role” in the atrocities. Months later, Facebook admitted it hadn’t done enough “to help prevent our platform from being used to foment division and incite offline violence.” Over the last few weeks, the revelations from the Facebook Papers, a collection of internal documents provided to Congress and a consortium of news organizations by whistleblower Frances Haugen, have reaffirmed what civil society groups have been saying for years: Facebook’s algorithmic amplification of inflammatory content, combined with its failure to prioritize content moderation outside the US and Europe, has fueled the spread of hate speech and misinformation, dangerously destabilizing countries around the world.

But there’s a crucial piece missing from the story. Facebook isn’t just amplifying misinformation.

The company is also funding it.

An MIT Technology Review investigation, based on expert interviews, data analyses, and documents that were not included in the Facebook Papers, has found that Facebook and Google are paying millions of ad dollars to bankroll clickbait actors, fueling the deterioration of information ecosystems around the world.
Facebook pays them for permission to open their content within Facebook’s app (where Facebook controls the advertising) rather than having users clickthrough to the publisher’s own web site, reports Technology Review: Early on, Facebook performed little quality control on the types of publishers joining the program. The platform’s design also didn’t sufficiently penalize users for posting identical content across Facebook pages — in fact, it rewarded the behavior. Posting the same article on multiple pages could as much as double the number of users who clicked on it and generated ad revenue. Clickbait farms around the world seized on this flaw as a strategy — one they still use today… Clickbait actors cropped up in Myanmar overnight. With the right recipe for producing engaging and evocative content, they could generate thousands of U.S. dollars a month in ad revenue, or 10 times the average monthly salary — paid to them directly by Facebook. An internal company document, first reported by MIT Technology Review in October, shows that Facebook was aware of the problem as early as 2019… At one point, as many as 60% of the domains enrolled in Instant Articles were using the spammy writing tactics employed by clickbait farms, the report said…

75% of users who were exposed to clickbait content from farms run in Macedonia and Kosovo had never followed any of the pages. Facebook’s content-recommendation system had instead pushed it into their news feeds.
Technology Review notes that Facebook now pays billions of dollars to the publishers in their program. It’s a long and detailed article, which ultimately concludes that the problem “is now happening on a global scale.” Thousands of clickbait operations have sprung up, primarily in countries where Facebook’s payouts provide a larger and steadier source of income than other forms of available work. Some are teams of people while others are individuals, abetted by cheap automated tools that help them create and distribute articles at mass scale…

Google is also culpable. Its AdSense program fueled the Macedonia- and Kosovo-based farms that targeted American audiences in the lead-up to the 2016 presidential election. And it’s AdSense that is incentivizing new clickbait actors on YouTube to post outrageous content and viral misinformation.
Reached for comment, a Facebook spokesperson told Technology Review that they’d misunderstood the issue. And the spokesperson also said “we’ve invested in building new expert-driven and scalable solutions to these complex issues for many years, and will continue doing so.”

Google’s spokesperson confirmed examples in the article violated their own policies and removed the content, adding “We work hard to protect viewers from clickbait or misleading content across our platforms and have invested heavily in systems that are designed to elevate authoritative information.”

Source: How Facebook and Google Actually Fund the Creation of Misinformation – Slashdot

China’s State Administration for Market Regulation (SAMR) has fined tech giants 43 times – with Alibaba, Baidu and Tencent told to pay up for failing to declare deals deemed to violate anti-monopoly legislation.

According to SAMR, more rigorous anti-monopoly law enforcement has seen businesses file more paperwork, sometimes about past transactions. SAMR’s own probes have spotted acquisitions that weren’t reported at the time.

Those efforts turned up 43 transactions, conducted between 2012 and 2021, that violated China’s 2008 Anti-Monopoly Law. Each count received a fine of ¥500,000 ($78,300). The regulatory body said that all were “assessed as having no effect of excluding or restricting competition”.

The market regulator posted about the fines on its WeChat account and Weibo page on Saturday.

State-sponsored media Global Times reported that Alibaba and Tencent each racked up more than ten cases.

[…]

China’s national anti-monopoly bureau was inaugurated on Thursday and guidelines for antitrust compliance of enterprises abroad were issued the same day.

The government in Beijing, and SAMR in particular, has been busy. Earlier this month the organization drafted new rules for internet platforms considered “super large” that hold them to higher standards than smaller, less influential ones in an attempt to stamp out anticompetitive behavior.

In September, the org ordered Alibaba, Tencent and more to stop blocking links to rivals. And it has been known to step in and outright ban mergers it deems imprudent.

[…]

Source: Beijing issues fines for 43 Big Tech M&A deals • The Register

It’s odd that China is leading the way in anti-monopolistic behaviour whilst the EU and US are lagging behind severely.

It’s been less than a year since Vizio became a publicly traded company, and one consequence of that is we know more about its business than ever before. The TV maker released its latest earnings report on Tuesday and revealed that over the last three months, its Platform Plus segment that includes advertising and viewer data had a gross profit of $57.3 million. That’s more than twice the amount of profit it made selling devices like TVs, which was $25.6 million, despite those device sales pulling in considerably more revenue.

When Vizio filed to go public, it described the difference between the two divisions. While Devices is easy to understand — 4K TVs, soundbars, etc. — Platform Plus is a little more complicated. It counts money made from selling ad placements on its TV homescreens, deals for the buttons on remotes, ads that run on streaming channels, its cut from subscriptions, and viewer data that it tracks and sells as part of the InScape program.

The company says shipments of its TVs fell to 1.4 million in 2021 compared to 2.1 million in 2020, a drop of 36 percent. CEO William Wang told investors on the call that he sees “pretty healthy inventory” going into the holiday season, so anyone planning to pick up a value-priced TV or soundbar should have some decent options available.

That spike in Platform Plus revenue, which shot up 136 percent compared to last year, did a lot to help Vizio make up the difference as profits from TVs dipped compared to last year. Supply chain and logistics problems affecting many companies hit Vizio hard, too, but execs also said the company is working with its third-party partners to help find warehouse and trucking employees.

Where the numbers keep growing is in its number of active SmartCast accounts, which are now over 14 million, and how much money it makes from each user on average. That number has nearly doubled from last year, going from $10.44 to $19.89. On the call with investors and analysts, Vizio execs said 77 percent of that money comes directly from advertising, like the kind that runs on its WatchFree Plus package of streaming channels, a group that recently expanded with content targeting. The next biggest contributor is the money it makes selling Inscape data about what people are watching.

Vizio isn’t the only smart TV maker that’s really in the advertising business — as we noted a couple of years ago, while you probably know Roku for its TV OS and streaming boxes, CEO Anthony Wood is very up front about its true model. Roku’s most recent report revealed that on average it’s pulling in $40 per month on each user, or more than double what Vizio manages. One way Vizio plans to catch up is by building its own in-app payment system, which chief revenue officer Mike O’Donnell says will roll out to consumers next year.

[…]

Source: Vizio’s profit on ads, subscriptions, and data is double the money it makes selling TVs – The Verge

With this kind of profitability it’s not really surprising that everyone is out to turn you into a product.

Aleksandr Zhukov, a Russian national and the self-proclaimed “king of fraud,” this week received a 10-year prison sentence for carrying out a $7m digital ad fraud scheme.

Zhukov was convicted in May of multiple counts of fraud and money laundering. He was arrested in Bulgaria in 2018 and extradited to America the following year.

“Sitting at his computer keyboard in Bulgaria and Russia, Zhukov boldly devised and carried out an elaborate multi-million-dollar fraud against the digital advertising industry, and victimized thousands of companies across the United States,” said Breon Peace, US Attorney for the Eastern District of New York, in a statement.

Starting around 2014, according to court documents, Zhukov and co-conspirators launched a fraudulent ad business called Media Methane that took payment from ad networks to present ads online to internet users.

“Rather than place these advertisements on real publishers’ webpages as promised, however, Zhukov and others rented thousands of computer servers located at commercial data centers in the United States and elsewhere, and used those data center computer servers to simulate humans viewing ads on fabricated webpages,” the US government’s indictment [PDF] says.

Zhukov and his associates – seven individuals who are being prosecuted separately – are said to have rented more than 2,000 servers in data centers in Dallas, Texas, and in Amsterdam, the Netherlands. Media Methane allegedly offered ad space on fabricated web pages to ad buyers who would bid for the space. But the company showed those ads to an audience of bots.

The bots – computer programs – are said to have been designed to interact with the fake web pages so as to simulate realistic mouse movements and webpage interactions like viewing videos on social media sites. They were trained to bypass CAPTCHA puzzles, to accept cookies, and to fake being signed-in to social media services. Their code, the indictment claims, managed to avoid the fraud detection software used by several US cybersecurity firms.

To make the fraud more believable, Zhukov is said to have leased more than 765,000 IP addresses from IP address leasing companies, which he then assigned to data-center servers and entered into a global registry of IP addresses. By falsely registering IP addresses in the names of companies like Comcast and Time Warner Cable, Zhukov made it appear that the addresses belonged to residential US internet subscribers of those services. Some 6,000 domains are said to have been spoofed in this manner.

The companies victimized by this scheme, said to have netted more than $7m, include The New York Times, The New York Post, Comcast, Nestle Purina, the Texas Scottish Rite Hospital for Children, and Time Warner Cable.

According to the government, Zhukov hired various developers to help him carry out his fraud scheme and he referred to himself as the “king of fraud.” The Feds claim he personally took in more than $4.8m through the ad fraud scheme, though Zhukov’s attorneys are currently trying to convince the judge that only about $1m should be subject to forfeiture.

Criminal ad fraud prosecutions have been relatively rare. Among the more notable cases are a 2011 click fraud case against six Estonian nationals and one Russian national, another from 2017, and a medical ad fraud case from 2019.

Source: King of Ad Fraud to reign in a US prison for years • The Register