Tech Brew Ride Home - Wednesday, 7/11 - The 2018 X Graduating Class

Episode Date: July 11, 2018

Facebook faces its first fine from the Cambridge Analytica scandal, a look at what Article 13 might do to the web, a juicy new Apple rumor, more hints from Magic Leap, and a look at Alphabet’s “Moonshot” factory. Stories from: @AlecMuffett, @adavies47 Tweets: @joshelman Links:Facebook is slapped with first fine for Cambridge Analytica scandal (Washington Post)Thread by @AlecMuffett: "Regards Article13, I wrote up a little command-line false-positive emulator; it tests 10 million events with a test (for copyrighted materia […]" #Article13 (Alex Muffett)European Networks Are Joining Forces to Take On Netflix and Amazon (The Hollywood Reporter)INSIDE X, THE MOONSHOT FACTORY RACING TO BUILD THE NEXT GOOGLE (Wired) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme ride home for Wednesday, July 11th, 2018. I'm Brian McCullough. Today, Facebook faces its first fine from the Cambridge Analytica scandal.

A look at what Article 13 might do to the web. A juicy new Apple rumor. More hints from Magic Leap and a look at Alphabet's Moonshot Factory. Here's what you miss today in the world of tech. The UK's data watchdog, the Information Commissioner's Office, has handed down a preliminary fine to Facebook for allowing Cambridge Analytica to access the data of millions of users. The penalty amounts to about a half a million pounds or $664,000 U.S.,

which was the maximum penalty the regulator could impose. As Tony Rahm pointed out on Twitter, that sounds like a very small amount of money, sure, but, quote, regulators can't invent fines from nothing. Their laws determine the formula. In this case, ICO levied its max. The max just isn't very high, end quote. The New York Times is Kevin Ruse did the math, and he estimates the fine amounts to about seven minutes' worth of Facebook's revenue.

And yet, Facebook refused to confirm whether or not it would even be willing to pay this fine. Aaron Egan, Facebook's chief privacy officer, said in a statement, quote, We have been working closely with the ICO in their investigation of Cambridge Analytica, just as we have with authorities in the U.S. and other countries. We're reviewing the report and will respond to the ICO soon, end quote. Quoting from the Washington Post reporting on this, in a roughly 40-page report, British regulators faulted Facebook for allowing University of Cambridge researcher Alexander Kogan

to build an app that collected data about Facebook users as well as their friends on behalf of Cambridge Analytica. The social media giant permitted apps to collect this information until 2015, but the UK watchdog said Tuesday it was concerned that many people on the site may not have been sufficiently informed that their data was accessible in this way, end quote. The Data Protection Act that Facebook has run afoul of was passed in 1998. If you think about it, Facebook might actually have gotten off cheaply in this case because the Cambridge Analytica scandal happened before the European GDPR law came into effect.

Under GDPR, fines would either be 20 million euro or 4% of global revenue, whichever was greater, which in Facebook's case, would amount to $1.9 billion. Elizabeth Denham, the British Information Commissioner, was asked on a radio program if, were a similar data infringement to happen today, Facebook would be on the line for potentially hundreds of millions of pounds in fines. She said that it could, but, quote, this is not all about fines, though.

Any company is worried about its reputation because people want to feel that their data is safe. Speaking of European Internet regulations or potential ones, Anyway, let's briefly go back and consider the EU's proposed Article 13 regulation, the one that is concerned with holding websites responsible for copyright infringing content posted by their users, aka the law that could kill meme culture. So the whole premise of this law is that websites should be able to enact YouTube-style content filters that will automatically take down any infringing content. But what activists and technologists like Tim Berners-Lee are worried about is the fact that no such system is perfect, and if you throw a dragnet over the whole friggin' web, how much legitimate content could get tangled up in the filters?

In other words, the fear is that by attempting to catch copyright infringing memes, could all speech on the web be essentially blunted? Well, the famous internet security evangelist Alec Muffet created a little program to test the effects of such a such a word. a content dragnet, and the results were depressing. Even when Muffet assumed an algorithm could attain a theoretical 99.5% accuracy rate, he found that that would still result in the erroneous censoring of 10,000 legitimate pieces of content for every 10 million online posts analyzed. As Muffet says, quote, you can see that we'd typically be making about 50,000 people very upset by miscategorizing them as copyright thieves or perpetrators of abuse, end quote.

Muffet goes on to note that in the real world, it's more likely that such content filters might, in the best case scenario, have a 1 to 2% error rate. In that scenario, Muffet says, quote, we have now tripled the number of innocent people that we annoy with our filtering, raising it to around 150,000 daily. In exchange, we stop about 990 badness per day. Let's be blunt. We make victims of, or annoy about 150,000 people each day in order to prevent less than a thousand infringements if we use these numbers, end quote. Now, of course, imagine scaling that sort of a system, even the best case scenario system, up to the entire web, and you basically have a scenario where millions of people are censored, all in the name of catching a handful of egregious copyright infringers.

So if I were to post, say, a Gareth Southgate and a waistcoat jiff to Twitter, and the dragnet takes it down because it falsely thinks I'm infringing on FIFA's ownership of World Cup broadcast rights, I'm sure the algorithm will fairly and quickly allow me to appeal its erroneous filtering, right? Anyway, link to his analysis in the show notes with tons more data and scenarios for all of you math nerds to pour over. All right, take this with a grain of salt. usual caveats, although he does have a good reputation for being accurate. Apple analyst Ming Chi Kuo of TF International Securities has released a new research note for investors that suggests this fall's expected refresh of Apple's product lineup could be a major top-to-bottom

sort of thing. Among Quo's predictions, three new iPhones, two OLED models in 5.8-inch and 6.5 inch sizes, as well as one low-cost LED model in the 6.1 inch size. All will have face ID and A12 processors. As per usual, the lower-cost models will have just the single lens and not the dual-lens cameras. New 11 and 12.9-inch iPad Pro models that might lose their home buttons to be replaced with face ID, of course. Processor upgrades for MacBooks and MacBook Prosos. a new low-priced notebook, which Quo originally thought would be a new MacBook Air, but now thinks will be some sort of a MacBook Air replacement. Also, the IMac could get what Quo calls significant display upgrades, along with a processor refresh.

The Apple Watch will get two new models that will have bigger displays and better heart rate detection features. It's actually unclear if the watch itself will get bigger, or if just the screen. will be improved. Also, new AirPods, as previously discussed, and the long-anticipated airpower wireless charging pad will hopefully finally make an appearance. And one more thing that should excite a very vocal minority of you. There apparently is going to be some sort of upgrade to the Mac Mini, which hasn't seen any upgrades in three and a half years. Sadly, no word on my beloved iPad mini, though. It's not just Hollywood that is scrambling to compete against Netflix's title wave of disruption. The Hollywood Reporter is reporting that Europe's biggest broadcasters

are all gearing up to launch streaming video services in countries like the UK, France, and Germany, all in an effort to keep up with Netflix overseas. Quote, in France they call it Salto, a joint online video platform unveiled last month operated by the country's three largest broadcast groups, France TV, M6, and TF1. In Germany, commercial TV giant pro-SybinSAT1, recently joined forces with Discovery Communications Eurosport on its own as yet unnamed video on-demand service set to launch next year. And in Britain, broadcast giants BBC, ITV, and Channel 4 signed a new five-year agreement to invest $165 million to turn British digital terrestrial TV platform free view into a, quote, fully hybrid platform.

that can provide, quote, the best in free to view live and on-demand TV, end quote. The German effort is being headed by a former Google and YouTube executive. The French effort could potentially serve around 60% of TV viewership in that country if it's successful. But the fear is that all these efforts might be too little, too late. In France, for example, Canal Plus has a video on-demand subscription service called Canal Play. When Netflix launched in France in 2014, Canal plays subscriber numbers dropped from 800,000 to 200,000 today. It is now estimated that Netflix controls 70% of France's streaming video market with 3.5 million subscribers. In Britain, Sky's video on-demand service is estimated to have only 6.4% of that market.

At the same time, there are an estimated 8.2 million Netflix subscribers in the UK and 4.4.4% of the U.K. 3 million British households are members of Amazon Prime. According to the Hollywood Reporter, the best hope for these European broadcasters is to try to combine their resources and hope to create some sort of comprehensive alternative library of content that will be appealing to so-called service stackers, also known as people who sign up for multiple streaming services. David's sidebottom of Future Source Consulting told the Hollywood reporter, quote, clearly you can't go head-to-head with Netflix, but if the services are different enough and the content is strong enough, they all have a chance in the market. Our research shows

customers are prepared to pay for multiple services if the offerings are different enough. There is definitely room for two to three strong video on demand services per market, end quote. So just like in the U.S., it's all about content and it's all about scale. My apologies, French listeners, plus cashé plus salammeh shows. No one seems to really really. know what it is. No one seems to really know what it does exactly, which is what makes it one of the biggest mysteries in Silicon Valley, of course. But we got one more nugget of news on that secretive augmented reality startup Magic Leap today. And that was that Magic Leap is reportedly partnering with AT&T in the U.S. as the sole U.S. vendor for its forthcoming consumer

AR platform when it launches theoretically later this year. AT&T is also invented. an undisclosed amount in the company, which has already raised $2.3 billion, and AT&T CEO John Donovan will gain, quote, observer rights on Magic Leap's board. I don't think we've mentioned Magic Leap on this show too often, but that's because we simply don't know much about it yet. Magic Leap has been developing some sort of AR product for years, and apparently, people that see it are more than wowed by it, thus the billions of dollars raised. But aside from some teaser videos, we simply have no idea what exactly it'll be like. A new teaser video is supposed to be released later today, though at the time of this recording, I've not seen it. Maybe we'll talk about it

tomorrow if it's newsworthy. In the meantime, as Josh Elman asked on Twitter, AT&T got the iPhone first, and now the Magic Leap first. Can Lightning strike twice? Speaking of companies with an air of mystery, when Google reorganized itself as alphabet a few years ago, it created X. which was once known as Google X, a so-called moonshot factory that was envisioned as an organization that would incubate big, world-changing new projects. Today, two of those X projects,

Loon and Wing, are graduating to become standalone companies under the alphabet umbrella. Loon is the project that wants to deliver broadband internet to rural and underserved areas via balloons hovering 6,000 feet above the ground, and Wing is developing drones that can make deliveries of packages and such. As standalone projects, Loon and Wing will now be staffing up, putting together things like HR and PR teams,

naming actual CEOs, and eventually having to answer to an actual P&L spreadsheet, no longer able to just live off of Google's largesse. Probably not coincidentally, Wired is out with a nice piece today describing X, which gave birth to Loon and Wing, as well as previously graduated X companies like Verily, a Life Sciences company, and Waymo, of course, the self-driving car company. Quoting from the piece,

The dual graduation of Loon and Wing, both big, ambitious projects, marks a watershed for X, and perhaps the moment when the secretive research and design division starts to make good on its mission. For the technological giant that has made its billions in advertising, X isn't a junk drawer for unusual projects that don't fit elsewhere. elsewhere in the corporate structure, it's a focused attempt to find a formula for turning out revolutionary products that don't just sit on a screen but interact with the physical world. By launching Loon and Wing into the world, X will soon discover whether it can effectively hatch new Googles and put Alphabet at the head of industries that don't yet exist, end quote. So if you wondered why Google morphed itself into Alphabet, this is why.

Larry and Sergey see themselves as the someday masters of a multi-headed hydra of a conglomerate for the new millennium, if you will. Loon and Wing are case studies that will tell us if this vision can become reality or not. Again, quoting from the piece, for six years, Loon's engineers and designers and balloon recovery operatives haven't had to worry about funding or revenue streams or hiring HR people or who's running their PR strategy. They've had access to Google's machine learning expertise and to X's design. design kitchen, a 20,000 square foot workshop for prototyping any mechanical device they could think of. They haven't needed a detailed business plan, let alone revenue or profits. They've been allowed to fail over and over, each time learning a little bit more, end quote.

But now Loon has graduated. Employees get actual diplomas, by the way. No one ever accused Larry and Sergey of being averse to cheesy dad jokes. If you want the whole story on the Google Guys and their desire to make a modern-day Bell Labs that actually works out. For the parent company, read the piece. As always, link in the show notes. So because people got upset about spoilers a couple weeks ago, and rightfully so,

I'm recording this sign-off before the England game even kicks off, so I am in no danger of spoiling the result. I figured that whatever happens, I'd be unable to hide my mood if I recorded this after the match. So this is a weird time travel scenario that I find myself in. When this post, the game will have happened, and football either will or will not still be coming home, and July 11th either will or will not go down in history as waistcoat Wednesday. But as I am speaking these words, I simply do not know the result

of the game. In the wise words of Bernard Sumner, express yourself, create the space, you know you can win, don't give up the chance, beat the man, take them on, you never give up, It's one-on-one. Talk to you tomorrow.