Facebook's New Move Isn't About Privacy. It's About Domination

By Siva Vaidhyanathan, Guardian UK

12 March 19

Mark Zuckerberg announced on Wednesday that Facebook would be ‘pivoting to privacy’. That’s an empty pledge

f you have visited China in recent years you might have discovered how difficult it is to make your way through without WeChat, an all-purpose mobile phone application. People in China use WeChat for everything from sending messages to family to reading news and opinion to ordering food to paying at vending machines to paying for a taxi. WeChat lets you deposit money in your bank, search for a library book, make a medical appointment, conduct business conference calls, and interact with the government. In China, WeChat is the operating system of your life, as it is for almost 1.1 billion people.

For Facebook’s CEO, Mark Zuckerberg, WeChat is both his greatest challenge and the model for the future of his company. Zuckerberg has long wanted Facebook to be the operating system of our lives – at least for those who live outside of China. WeChat is what Facebook has yet to become. WeChat, should it move beyond China and its diaspora, is also the greatest threat to Facebook’s global domination.

This, better than any empty and distracting pledge of “pivoting to privacy”, explains Zuckerberg’s announcement on Wednesday. He pledged to federate the messaging services of his three non-Facebook platforms, Instagram (1 billion users), WhatsApp (1.5 billion users), and Messenger (1.3 billion users). He would extend the strong encryption that distinguishes WhatsApp from many other messaging services (although not, significantly, from growing and encrypted potential competitors like Telegram and Signal) to the other two platforms and allow content to move easily among them.

Facebook hopes to draw those who use competing services like Telegram, Signal, Skype, Google’s Hangouts (formerly known as GChat), Apple’s IMessage, or classic SMS to Facebook’s various and soon-to-be-united messaging services. Crushing all those apps, along with email and old-fashioned phone calls, would be a major step toward becoming the operating system of our lives.

Basically, this announcement means the WhatsApp won’t change as many feared – abandoning encryption and becoming more like Messenger. Instead, Messenger will become more like WhatsApp. This would be the first step toward unifying these services to work and look a lot more like – and thus prepared to compete against – WeChat.

Despite all the hype, Zuckerberg said nothing about changing Facebook itself. Facebook, with 2.3 billion users and growing, will still watch everything you do, will dictate what you read and see in your Newsfeed, and will feature advertisements targeted at you based on the massive surveillance system Facebook has built over the past decade. It will still distribute pictures of puppies and babies along with hate speech, conspiracy theories, and calls to genocide. It will still chip away at democracy and starve journalism.

This recent announcement, with all its unjustified hype about a “pivot” or a “move” serves more of Zuckerberg’s interests. It distracts journalists and critics from several revelations that show how brazenly Facebook exploits and abuses its users.

For years we have been instructed to use “two-factor authentication” to secure the login process for services and platforms. Facebook itself encourages us to have it send a message to our mobile phones to confirm that we are who we say we are before logging in. But Facebook does not protect your number from prying eyes or advertisers. Using a phone number anyone can look up a Facebook profile, and there is no way for users to opt out. This puts people at risk for the sake of Facebook’s ability to track them. Given that identity on WhatsApp is mobile-number specific, it’s likely that our numbers will be the source of more vulnerability in the future.

And last week we learned that at least 11 popular health applications were sharing extremely sensitive personal data with Facebook through mobile phones. At least one service, Flo Period and Ovulation Tracker, decided to cease that practice once it came to light. This was the latest in a series of revelations about how Facebook tracks people – even those who are not Facebook users – through mobile devices and applications. Nothing in Zuckerberg’s latest announcement changes this.

Beyond abuses, Facebook has another plan to make itself essential to the daily lives of people around the world. It plans to create a new crypto currency for its users. WhatsApp users could soon use the currency to order food deliveries or purchase train tickets. Imagine if the 1.5 billion WhatsApp users start sending money to relatives in other countries using a currency Facebook controls and payments Facebook authorizes. That could push away many unsavory services that charge high fees. It could also consolidate even more unaccountable global power in Facebook.

The ultimate unification of these platforms under the mothership, Facebook, could effectively block any governmental attempts to sever Instagram and WhatsApp from the company. It might take years for the European Union or the United States government to muster the legal foundation and political will to break up Facebook. By that time Zuckerberg could plead that this new, unified service has shared its back-end data and core functions for too long. There would be nothing distinct to sever. Plus, Zuckerberg could argue that encrypted private messages protect users better than the only other major rival in the world, WeChat.

In the coming battle against WeChat, Facebook can use its pledge to protect private messages from snooping states to his advantage. TenCent, the company that offers WeChat, is very close to the government of the People’s Republic of China and WeChat users assume their communication is subject to state surveillance. Facebook might collaborate with brutal authoritarians like Rodrigo Duterte in the Philippines, but it’s still not yet as dangerous as WeChat. That’s something, I guess. And it might be enough to ensure domination for many years to come.

For too long, we have taken Mark Zuckerberg at his word. Too many times he has betrayed us. Let’s not fall for it again. This move is not about protecting you. It’s about defeating other companies and consolidating global power.

The Trudeau Scandal Happens All the Time in America

By David Dayen, The New Republic

12 March 19

Politically influential companies have been avoiding criminal prosecution since long before Trump became president.

he most acute political scandal in North America—the one with the greatest chance of toppling a head of state anytime soon—is occurring not in the United States, but Canada. Prime Minister Justin Trudeau is barely hanging on to power after being accused last month of pressuring his attorney general to abandon the criminal prosecution of an influential company that hails from Quebec, his political stronghold.

Political media in the U.S. can’t comprehend how this can be so damaging. “There’s no money, no sex and nothing illegal happened,” wrote Rob Gillies of the Associated Press. “This is what passes for a scandal in Canada.” 

It should also pass for a scandal in America, but selective prosecution—which spares the powerful while punishing those without connections—has become all too common in this country, and notably so under President Obama. As Democratic candidates seek to save America from President Trump’s kleptocracy, they ought to acknowledge that this era of unaccountability long predates him, and be as indignant about it as our Canadian neighbors.

SNC-Lavalin is a Montreal-based engineering firm that employs roughly 9,000 Canadians on numerous construction projects inside the country. It also does substantial business abroad, where it’s been accused for years of corruption and fraud. This specific case alleges that the company paid 48 million Canadian dollars (around 36 million USD) to Libyan government officials to secure construction contracts from 2001-2011, then defrauded the Libyans for about 130 million Canadian dollars. 

The Royal Canadian Mounted Police submitted these charges in 2015, before Trudeau entered office. A successful criminal prosecution would bar SNC-Lavalin from bidding on any federal government contracts for 10 years. But the Globe and Mail broke the news in early February that Trudeau’s office had asked Attorney General Jody Wilson-Raybould to abandon the criminal charges. Wilson-Raybould, who also sat in Trudeau’s cabinet as justice minister, later confirmed a “barrage” of pressure from senior officials, including Trudeau himself, who asked her to “help out” with the case and “find a solution.” She rebuffed their campaign, was demoted, then resigned.

Trudeau’s team sought a deferred prosecution agreement (DPA), which would impose a financial penalty and some greater oversight of SNC-Lavalin, but no criminal sanctions, enabling it to continue to bid on government contracts. Prosecutors in Canada didn’t have the option of deferring criminal prosecution until a change in the law last year, one that SNC-Lavalin lobbied for.

While deferred prosecution agreements are new to Canada, they’ve been used in corporate settlements in the U.S. for more than two decades, particularly during and after the last financial crisis, when hundreds of DPAs were executed. In other words, the major difference between the scandal engulfing Canada’s government and what happens routinely here is that nobody in our Justice Department needs to be pressured to issue a deferred prosecution agreement.

The Justice Department’s most notorious DPA of the past decade was in 2012 with HSBC, the bank that facilitated money laundering for drug cartels and terrorist groups. Drug lords even designed specially shaped boxes filled with money that slid easily through HSBC Mexico’s teller windows. Neither HSBC nor its executives were criminally prosecuted, and the bank was merely fined $1.9 billion—around five weeks’ profit.

Justice Department officials had cautioned that criminal charges would destroy HSBC and put thousands of innocent bank tellers out of work. Eric Holder, Obama’s attorney general at the time, expressed concern that banks like HSBC have become so sprawling that “it does become difficult for us to prosecute.” The phrase “Too Big to Jail” was coined out of the HSBC mess.  But Holder had been warning of “collateral consequences” for prosecuting corporations since a memo he wrote while deputy attorney general in 1999.

Trudeau echoed this reasoning in remarks last week about the SNC-Lavalin scandal. Referring to a meeting with Wilson-Raybould, he said, “I stressed the importance of protecting Canadian jobs and re-iterated that this issue was one of significant national importance.” 

This justification for neglecting serious crimes is sometimes known as the Arthur Andersen defense, named after the accounting firm that destroyed documents as Enron’s auditor. The 28,000-employee company went out of business amid a successful prosecution, which the Supreme Court overturned years later on a technicality over jury instructions. (The firm had already split up by then.) 

Law enforcers and business lobbyists alike have agreed that the Arthur Andersen case was a mistake that sent thousands of low-level accountants to the unemployment line. Few mentioned that Andersen employees simply got jobs with other accounting firms. Similarly, if SNC-Lavalin couldn’t bid on government contracts, somebody else would, and the same number of Canadians would fill those jobs.

Trudeau also made clear his real rationale for pressuring his attorney general: as a member of Parliament, he represents Quebec, home to SNC-Lavalin. Politicians are inclined to defend the interests of their constituents, but as prime minister, Trudeau’s actions affect the whole country. He sought to pervert the justice system so a favorite-son company could evade punishment and continue to profit from the Canadian government.

From his firing of FBI Director James Comey to reportedly trying to prevent the AT&T–Time Warner merger because he doesn’t like CNN (a Time Warner subsidiary), Trump has perverted the law in ways that tower over the relatively gentle nudges of Trudeau’s government. But the pre-Trump status quo, of perfunctory deferred prosecutions and no jail terms for financial fraudsters, was itself a scandal. That’s why jettisoning Trump won’t, on its own, restore the rule of law in America. The Democrats competing for president also must lay out a plan for treating every American equally under the law, no matter how rich or connected. Because the party’s last president failed this test.