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Regulate, break up, open up: how to fix Facebook in 2022 | Facebook

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This year the public saw an alarming side of Facebook, after a huge leak of internal documents revealed the extent of vaccine misinformation and extremism on the platform, a two-tier system of who gets to break the rules, and the toxic effects of Instagram for teens.

Digital rights activists around the world have warned about these issues for years, but with the company facing mounting pressure, next year could provide an unprecedented opportunity for action.

We spoke to researchers, activists, and tech experts about how Facebook can be reined in 2022 and beyond, and the innovative solutions that could bring about change.

Regulation

In the US, the path towards regulation is likely to be a long one. But this year has seen rare bipartisan calls to tighten the rules on big tech.

Section 230 of the Communications Decency Act, which protects Facebook from lawsuits if users post anything illegal, has once again come under scrutiny. Rashad Robinson, president of the civil rights group Color of Change, who led a corporate boycott of Facebook in July 2020, says amending it is a critical first step.

“I believe that there needs to be a removal of the Section 230 immunity when it comes to paid advertising and when it comes to things that are connected to product design,” Robinson said.

Meanwhile, lawmakers have introduced bills – including the Children and Media Research Advancement Act and the Algorithmic Justice and Online Platform Transparency Act of 2021 – that would, respectively, fund research into the platform’s effects on young people and tackle Facebook’s often inscrutable algorithms.

Robinson says such laws would address “the ways in which Facebook makes money and refuses to be held accountable”.

The whistleblower Frances Haugen and Rashad Robinson, president of Color of Change, testify on Capitol Hill on 1 December.
The whistleblower Frances Haugen and Rashad Robinson, president of Color of Change, testify on Capitol Hill on 1 December. Photograph: Alex Wong/Getty Images

In Europe, 2022 will see a final decision by the European court of justice (ECJ) in a German online gaming case that could pave the way for Facebook to face legal ramifications for privacy violations.

Javier Pallero, the policy director at the digital civil rights organisation Access Now, says any regulation must consider human rights, particularly when it comes to content moderation in the global south. Facebook’s current moderation model is flawed, he says. “They either allow too much or they take down too much and they end up basically censoring entities, activists, and so on around the world. So you need human moderators, ergo, you need more investment, you need more people.”

Breaking it up

Facebook’s sheer size and market dominance remain a major barrier to change, and a growing chorus of lawmakers and others are calling for a simple solution – break it up.

Matt Stoller, research director at the American Economic Liberties Project, Facebook’s vast power is the greatest threat to democracy. “He’s operating like a sovereign,” Stoller says of Zuckerberg. “And that’s what a monopolist is. Somebody who has control, governing power over a market.”

First, Stoller urges breaking up Facebook’s grip on the social media market. Once Facebook took over all its competitors, he says, “they just started surveilling and doing anything that they wanted, and there was really no way around it”.

Second, Stoller proposes bringing criminal charges against Zuckerberg and his leadership team over allegations of fraud and insider trading. (Facebook has rejected those claims.)

Third, Stoller recommends imposing rules on the social media marketplace so companies such as Facebook can’t be financed by or engage in advertising that is driven by hyper-personalized surveillance.

Fixing Facebook from within

Some of the strongest pushes for change are coming from Facebook’s own workforce or former workers, including Frances Haugen, the former product manager at Facebook’s civic integrity department who disclosed tens of thousands of the company’s internal documents to the Wall Street Journal and the US Securities and Exchange Commission.

Jeff Allen and Sahar Massachi are a former data scientist and data engineer at Facebook who helped build the company’s election and civic integrity team and now run a non-profit organization called the Integrity Institute. They believe the solution is empowering integrity professionals who deal with issues such as trust, security and detecting fake activity.

people wear angry emoji masks
Protesters picket the Facebook office in the Philippines to condemn fake news, hate speech and vilification campaign of health activists, in suburban Taguig in 2019. Photograph: Bullit Marquez/AP

Massachi says Facebook’s culture currently incentivises the opposite: one team will flag harmful content and recommend driving down engagement, while another team will find a trick to increase engagement with the harmful content.

To fix this, he proposes introducing a monthly metric that ranks companies based on integrity. Regulators could monitor companies based on this metric. He envisions regulators being able to take concrete action if companies don’t keep up their score.

Katie Harbath, founder and CEO of the tech policy consultancy Anchor Change, said the lack of empowerment for integrity teams was a structural problem at Facebook. “The fact that the integrity team reports into the growth team is problematic,” she said, leading to prioritising growth. “One way to think about this would be to actually put integrity and growth on the same level within the company.”

Open the company up to researchers

When Facebook promised to collaborate on a research initiative with academics after the Cambridge Analytica scandal, there were hopes it would shed light on how Facebook affects society. Instead, researchers were met with flawed and incomplete data, with only a handful of scholars granted access.

Nate Persily, professor at Stanford Law School and the director of the Stanford Cyber Policy Center, has worked with Facebook in an academic capacity but became increasingly frustrated with the amount of data the company shared with researchers. Since then he has drafted text for a law – the Platform Transparency and Accountability Act – which would grant scholars access to information the social media company holds, while protecting user privacy.

“These companies have thrived in secrecy and we are now seeing that from the Frances Haugen revelations,” Persily said.

The impact of opening the data up would be twofold: first, it would educate academics and the public about what’s happening on the platform, including the role of algorithms, apps targeting kids, and rates of disinformation, Persily said. Second, Facebook would behave differently if it knew it was being watched.

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Why Intel’s latest chip factory news gives us deja vu • The Register

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Comment Intel puts on a show for its biggest manufacturing announcements, with episodes every few years using a rotating cast of CEOs and US presidents.

Intel boss Pat Gelsinger and President Joe Biden were the latest to join the series, on Friday jointly announcing the chip maker’s investment of $20bn in plants near Columbus, Ohio. The fabs could be operational by 2025 and make chips down to 2nm and beyond.

“This is our first major site announcement in 40 years,” Gelsinger said on on-stage later in the day with Ohio Governor Mike DeWine (R).

“Intel’s announcement today is a signal to China and to the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America,” DeWine said.

Intel’s announcement today is a signal to China and to the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America

Intel has previously wheeled out chief executives and commanders-in-chief to announce the plowing of billions into factories, with the presidents using the events to highlight the bump in manufacturing and jobs for the United States. But the aftermath has been littered with unfulfilled promises and failed goals, partially due to Intel’s sometimes incoherent manufacturing and product strategies.

This time around, Gelsinger has identified manufacturing as a major growth driver, as part of his Integrated Device Manufacturing 2.0 strategy. Intel has promised to expand its contract manufacturing in a meaningful way, fabricating components that use the non-x86 Arm and RISC-V architectures, and signed on Qualcomm, a semiconductor rival, as a foundry customer.

Intel’s latest $20bn commitment will be used to build two plants on a 1,000-acre site that could be expanded to up to 2,000 acres and eight fabs. The site will employ 3,000 folks with an average salary of $135,000, and also bring 7,000 construction jobs to Ohio, DeWine said.

You can’t fault Gelsinger for announcing the factories: his shareholders and the world, amid a chip supply crunch, expect it. But not only should the news be seen in an historical context, it remains to be seen if Intel can meet the promises it laid out for the Ohio facilities.

In 2011, then-CEO Paul Otellini announced Intel was investing $5bn to complete Fab 42 when President Barack Obama visited an Intel facility in Hillsboro, Oregon. At the time, Fab 42 was to make 14nm chips, including smartphone processors, and create 4,000 jobs.

Ultimately, the announcement turned out to be a false promise. Intel cancelled completion of Fab 42 in 2014 after manufacturing woes and blunders in markets including mobile devices. In 2016, Intel laid off 12,000 employees to prioritize its products in the data center and the Internet of Things markets.

In 2017, then-CEO Brian Krzanich repeated the pledge to complete Fab 42, this time repackaged as a fresh announcement with President Donald Trump. Intel said it would invest $7bn to complete Fab 42 to make 7nm chips.

Intel powered up Fab 42 in Arizona in late 2020 to make not 7nm but 10nm chips. That’s the process node that was delayed for years due to critical fabrication missteps, causing Intel to lose its manufacturing lead over TSMC and Samsung.

Chipzilla hopes to do better on its commitments with Gelsinger, who wants to bring Intel back to its engineering roots.

Intel in September broke ground on more factories in Arizona, which carry a $20bn price tag. Work is also underway on manufacturing expansions in Oregon and New Mexico, and overseas in Ireland.

There’s a growing need to commit capacity to foundry customers, and to meet the higher demand for the company’s chips, an Intel spokesman told The Register in an email.

Gelsinger has stressed the “importance of building a more resilient supply chain and ensure reliable access to advanced semiconductors in the US for years to come. Today’s announcement is a critical step in our plans to fulfill these objectives,” the Intel spokesman said. ®

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MEPs give green light to take on Big Tech

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The draft DSA measures include tackling illegal content and holding social media platforms accountable for their algorithms.

The European Parliament has voted in favour of the long-debated Digital Services Act (DSA), Europe’s attempt to shift the balance of power from the hands of Big Tech and into the hands of EU residents.

MEPs voted 530 votes to 78 – with 80 abstentions – to approve the draft DSA text that will see tech giants held accountable for content on their platforms in a spate of new rules and regulations.

The move comes just a month after MEPs voted in favour of the Digital Markets Act (DMA), a similar set of proposed laws that seek to impose stricter rules around tech competition in the EU and rein in the monopoly large multinationals hold in Europe’s digital space.

The set of draft DSA measures include tackling illegal content, preventing the spread of misinformation and disinformation and holding social media platforms accountable for their algorithms.

The Parliament introduced several changes to the initial proposal by the European Commission, including exempting small businesses from certain DSA obligations, making targeted advertising more transparent and easier to refuse, and prohibiting targeted ads for minors.

Online platforms will be prohibited from using “deceiving or nudging techniques to influence users’ behaviour through ‘dark patterns’”, according to the revised DSA draft. Large platforms will also be required to provide “at least one recommender system that is not based on profiling”.

The approved text will now be used as the mandate to negotiate with the French presidency of the Council, representing member states. The negotiation will be led by Christel Schaldemose, an MEP from Denmark.

“Today’s vote shows MEPs and EU citizens want an ambitious digital regulation fit for the future,” she said after the vote. “Online platforms have become increasingly important in our daily life, bringing new opportunities, but also new risks,” she added.

Schaldemose said it was the duty of the European Union to make sure “what is illegal offline is illegal online” and that new digital rules need to benefit consumer and citizens, not Big Tech.

Facebook whistleblower Frances Haugen had hailed the DSA as a potential “global gold standard” in government regulation of Big Tech in her address to the European Parliament last November.

She said that, if enacted and enforced correctly, the DSA has the potential to inspire other nations such as the US to take on Big Tech and “safeguard democracy” before it’s too late.

“Every modern disinformation campaign will exploit news media channels on digital platforms by gaming the system,” Haugen told MEPs in her opening statement. “If the DSA makes it illegal for platforms to address these issues, we risk undermining the effectiveness of the law,” she said.

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Dangerous game? Football clubs look to mine fans’ cash with crypto offerings | Cryptocurrencies

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When FC Barcelona took to the pitch for the 2021 Spanish Super Cup final, the trophy wasn’t the only prize at stake.

Thousands of blaugrana fans were also keeping an eye on the market for FCB’s “fan token”, the club’s very own cryptocurrency. Socios, the web-based platform that pioneered fan tokens, had promised to “burn” 20,000 tokens for every goal Barcelona scored – and 40,000 if they lifted the cup.

In theory, success on the pitch would increase the scarcity of the currency, boosting its value. In practice, Barcelona lost the game and, footballing passions aside, it didn’t make much difference anyway. With 3.5m of the tokens in circulation, not to mention millions more retained by the club for future issuance, a few thousand here or there wouldn’t have moved the needle.

Q&A

What is cryptocurrency?

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Cryptocurrencies are an alternative way of making payments to cash or credit cards. The technology behind it allows the ‘money’ to be sent directly to others without it having to pass through the banking system. For that reason they are outside the control of governments and are unregulated by financial watchdogs – and transactions can be made in a way that keeps you reasonably pseudonymous.

If you own a crypto-asset you control a secret digital key that you can use to prove to anyone on the network that a certain amount of that asset is yours. If you spend it, you tell the entire network that you have transferred ownership of it, and use the same key to prove that you are telling the truth. Over time, the history of all those transactions becomes a lasting record of who owns what: that record is called the blockchain.

Bitcoin was one of the first and biggest cryptocurrencies and has been on a wild ride since its creation in 2009, sometimes surging in value as investors have piled in – and occasionally crashing back down. Dogecoin – which started as a joke – has also seen a stratospheric rise in value.

Sceptics warn that the lack of central control make crypto-assets ideal for criminals and terrorists, while libertarian monetarists enjoy the idea of a currency with no inflation and no central bank.

The whole concept of cryptocurrencies has been criticised for its ecological impact, with “mining” for new coins requiring vast energy reserves and the associated carbon footprint of the whole system.

Richard Partington and Martin Belam

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But the stunt symbolised something more, the burgeoning love affair between football and cryptocurrency, an alliance that holds the promise of new revenue streams for a game that is already awash with cash but always wants more.

Football finance expert Kieran Maguire thinks clubs have latched on to crypto because revenues from other sources are starting to level off, having risen reliably for decades.

“Football clubs have realised that we’re now at max broadcast revenues, with modest growth at most to look forward to,” he said.

“As far as commercial sponsors are concerned, we’re seeing deals being renewed but not with increased money. The only way to increase matchday sales is to increase prices and fans are reluctant.”

Manchester United – whether one believes the club or not – claims to have 1.1 billion fans on the planet. With revenue of £488m in 2019-20, that’s just 45p per year, per fan.

“Clubs are thinking: ‘Can we ‘find another way of extracting money out of that huge fanbase?’ That’s where tokens come in.”

When AC Milan launched a token in early 2021, it raised $6m (£4.4m) in under an hour, or about 12% of the value of the club’s record signing, Leonardo Bonucci. Paris Saint-Germain’s token, the most valuable, has a market value of $45m.

In the murky and unregulated world of crypto though, it’s hard to know how much clubs are actually making. Socios said last year it had sold $300m worth of fan tokens but would not say how much of that went to the clubs with which it partnered.

Other platforms, such as Binance, are also moving into the fan token market, indicating there is room for growth, particularly given that only a few dozen clubs have entered the market in any meaningful way.

Pedro Herrera, senior blockchain analyst at DappRadar, a marketplace for blockchain-related apps, said that most fans buy tokens for the associated perks, such as votes on small decisions about which song to play over the stadium tannoy after a goal, or entry into a draw to win a signed shirt.

“It’s a win for the fan because they feel more involved; it’s a win for the team because it’s adding a layer of monetisation; and it’s a win for the [crypto] industry because you attract the masses and it’s one step closer to mass adoption.”

Maguire isn’t against crypto but adds a more sceptical tone: “Lots of fans love crypto and in its purest form it’s great. Banks have been overcharging people for years in terms of transaction fees and if crypto can reduce those fees that’s fantastic.”

“The problem is when unscrupulous traders, particularly via social media, seek to exploit fans who think a token is a serious investment product, rather than a glorified collectible.

“It’s magic beans. So long as it’s sold as a digital Panini card, it’s OK. But when it’s being seen as a form of investment, it’s moving into uncomfortable territory.”

“It’s unregulated, it’s volatile and it’s subject to manipulation by people who own large amounts of the asset.”

Fan tokens, though, are a mere paragraph in football’s rapidly unfolding crypto saga.

In 2021, crypto sponsors piled into football and were welcomed with open arms by cash-hungry clubs, leagues and players.

Watford player with stake.com shirt
Watford have perhaps England’s biggest crypto deal, a front-of-shirt sponsorship from Stake.com, which offers crypto gambling. Photograph: Tess Derry/PA

Exchange app Crypto.com sponsors Italy’s Serie A, one of the world’s most glamorous leagues, while Socios is Internazionale’s shirt sponsor. EToro, a trading platform that facilitates investment in multiple cryptocurrencies, has deals with more than half of the clubs in the Premier League.

Southampton players are understood to have been offered the option to be paid bonuses in bitcoin, as part of a £7.5m-a-year deal with Coingaming Group. And in January 2021, striker David Barral made history when he became the first player in a major league to be signed with bitcoin, albeit in Spain’s third tier with Internacional de Madrid.

Much better-known players and ex-pros, such as Paul Pogba and John Terry, are promoting cryptocurrencies, trading platforms and non-fungible tokens (NFTs) – the controversial digital art form – too.

This should come as no surprise given the reach that big-name stars have via social media and the money they can make from promotions. Other partnerships are perhaps more unexpected. Visitors to the Twitter profile of former Republic of Ireland international Tony Cascarino might have been wrongfooted by the former striker’s sudden change of pace midway through 2021. One moment he was musing on the latest developments in the Premier League, the next he was evangelising about blockchain bank Babb (no relation to former Ireland teammate Phil) and musing that the “crypto market is on fire”.

Even in its infancy, the reputational risks of this new commercial pact between crypto and football have become all too clear. Last year, Manchester City’s deal with a mysterious firm called 3Key Technologies fell apart in a matter of days as it emerged that nobody seemed to know anything about the company or its executives.

Arsenal FC ad promoting fan tokens
The Advertising Standards Authority banned Arsenal FC ads promoting fan tokens. Photograph: ASA/PA

In December, Arsenal were rapped on the knuckles by the Advertising Standards Authority (ASA), which banned a club promotion that it said was exploiting fans’ “inexperience or credulity, trivialising investment in crypto assets, misleading consumers over the risk of investment and not making it clear the ‘token’ was a crypto asset”.

“For those in sport looking for sponsorship, it’s a whole new market of opportunity but it’s a bit of a landmine you’re dealing with,” said Bill Esdaile, managing director of sports marketing agency Square in the Air.

“My gut feeling is that such a small percentage of people understand how [crypto] works that too many decisions are made on trust, thinking that if [crypto firms] say they’ve got the money, they do.”

The amounts on offer appear to be going up.

Premier League strugglers Watford have perhaps the country’s biggest crypto deal, a front-of-shirt sponsorship from Stake.com. The site offers crypto gambling, which isn’t legal in the UK but may appeal to the league’s hundreds of millions of viewers around the world.

The arrangement even means that Watford players’ shirt sleeves bear the logo of Dogecoin, a “joke” currency whose value swings around wildly, often in response to tweets by Tesla multibillionaire Elon Musk.

Kieran Maguire estimates that the shirt deal could be worth up to £8m, based on the typical value of such partnerships, while an insider at Watford told MSN in August that the Dogecoin sleeve display added £700,000 into the mix.

Sums like these will become increasingly difficult for clubs to ignore, he thinks, particularly if the government goes ahead with a root-and-branch overhaul of gambling regulation that could see football lose the cash cow of shirt deals with betting firms.

“They [clubs] see the token market as slightly to one side, it won’t get picked up by the gambling review and it will help fill the gap,” says Maguire.

“Those deals of £5m to £8m could be replaced by NFT advertising and by crypto.”

In a recent paper, psychology researcher and gambling expert Dr Phil Newall warned that football sponsorship may be about to swap one risky product for another.

“Research has found that cryptocurrency traders are likely to have problem gambling symptoms, and has identified psychological similarities between cryptocurrency trading and online sports betting,” wrote Newall. He believes removing gambling advertising may create more space in which to legitimise equally dangerous products.

As they burn through cash in the pursuit of glory, it seems unlikely that clubs will worry about that.

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