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The Lede, Welp, Here Comes the Regulation. Big Tech Blunders Will Bring On the Government

The Lede, Monday, March 19, 2018
By David Royse

Good morning.

The disruptive innovators we like to cover here may have taken the word disruptive in the wrong sense. We mean it in a good way. But getting involved in disrupting a presidential election seems to have made some people a bit tense.

I typically stay away from U.S. electoral politics – you can get A LOT of it elsewhere if that’s your thing. But a story broke over the weekend that crosses over into what we cover – people out here trying to make cool things, solve problems and make lives better. The way a British company appears to have used Facebook data during last year’s election has alarmed some – and whatever happens in the Facebook case (Attention Mark Zuckerberg, Congress is calling) the fallout is going to be watched very closely by anyone making social apps, working in social media, or trying to use any of the “big data” that is now “out there” on all of us.

The LEDE
Will Tech Companies Have to Answer For Facebook’s “Role” in Election?

A Tweet that sums up concern among companies that collect lots of data:

“Welp. Tech is definitely about to get regulated,” tweets Aaron Levie, the CEO at cloud storage firm Box.  Levie went on to add, “And probably for the best,” though that’s where many in tech might disagree, or at least withhold judgement until we see what is proposed.

Looks like Levie might be right.

This weekend, British media broke the story of how a startup called Cambridge Analytica built an algorithm to get access to more than 50 million Facebook profiles – many without consent – and create individual psychological profiles of their owners in order to create targeted political ads. Within hours at least one U.S. senator, Amy Klobuchar of Minnesota, was already calling for Facebook CEO Mark Zuckerberg to come have a word with Congress.

“They just can’t say ‘trust us” anymore,” Klobuchar said in an interview this morning on NPR. “I don’t know why this CEO, even though he’s super famous and he’s made a lot of money, can’t come before the committee.”

Massachusetts Attorney General Maura Healey has already opened an investigation as well.

So what happened?

When you have time, read the Guardian/Observer story if you haven’t already. It lays it all out. If you want a briefer version – watch the video at the top of the story and listen to the kid-genius at the heart of it all explain how it worked.

Basically, what seems to be upsetting people is that the English company, working for Steve Bannon, used people’s Facebook profiles, many without their consent, to create what were essentially psychologically-tinged dossiers of people in order to know what kinds of political ads to serve them.

What they did with the data doesn’t seem to me to be a problem – political organizations do this all the time, though usually on a smaller scale, and marketers do too. Targeted ads shouldn’t surprise people. What seems to have angered the would-be regulators, is that Facebook users likely didn’t know the degree to which Cambridge Analytica went to in profiling them after getting them to answer some questions. And, most egregiously it would seem, that its algorithm is alleged to have gone beyond the consenting Facebook users who answered the questions and pulled in data on those consenting users’ friends. Facebook didn’t inform users whose data had been harvested, (which may have violated existing laws.)

Klobuchar said she wants to see Zuckerberg on Capitol Hill to answer some questions.

Her interview on NPR this morning likely has already raised some red flags in the tech world, where many see new media’s utility and success in being able to sidestep some of the conventional rules that apply to old media. In fact Klobuchar has introduced legislation that would have social media companies follow the same rules for print and TV companies when it comes to political ads.

“These are brilliant companies with some of the most brilliant people in America working for them, and we’re proud of these companies,” Klobuchar said. “But they clearly have taken the world as the wild west, that they can do anything they want.”

The Follow
Check Yourself Before You Wreck Yourself

The “Facebook is out of control” and needs some oversight narrative follows another “tech-gone-rogue” story from last week, the story of maverick blood testing company Theranos and its media darling CEO Elizabeth Holmes.

This story got plenty of attention in Silicon Valley, but if you missed it or only vaguely were aware of it, it also has ramifications for everybody else in R&D world, and, maybe, lessons on how naively exuberant the public and investors can become about the promise of tech.

Theranos promised a lot – a revolution in home blood testing. But it didn’t work, it seems. But that realization only came after billions had been invested.

USA Today last week hit on part of the reason this may be a cautionary tale – Holmes’ force of personality and her sales ability masked flaws in the product.

From USA Today: “Theranos raised money on the strength of Holmes’ ability to pitch her vision, whose reality often didn’t match up. But there were plenty of takers. Theranos’ fundraising resulted in a valuation of $9 billion — half of which belonged to Holmes, making her one of the youngest billionaires on the planet, at least on paper.”

An editorial in the New York Times called it “one of the most outrageous acts of corporate prestidigitation since Enron convinced us that it had reinvented energy.”

(The story is not new – the Wall Street Journal reported on the company’s shortcomings two years ago. But it’s back because federal securities regulators charged Theranos and Holmes with fraud last week.)

Elizabeth Holmes Theranos

How many other forceful personalities are out there making promises about the cool things they can help us do in the future? When Elon Musk speaks, it’s like an oracle. Bill Gates was the same way. They have at least produced some working things. But how many others out there are talking a good game without producing a good product? It’s a good reminder to keep a skeptic’s eye.

But a rogue actor could bring the hammer down on others trying to do big things, to push boundaries in important areas of research and product development. We need those dreamers to be able to take chances, and over-regulation can sometimes get in the way. But you can’t expect not to be regulated when there are these kinds of stories.

But, OK, it’s just one rogue actor, is what some will say. Others will say, however, that a culture of risk taking, which can be good, also breeds a hubris. It’s what Klobuchar talked about with Facebook, what many are saying about Silicon Valley.

From the New York Times: “This is Silicon Valley hubris in force,” said Lakshman Ramamurthy, a former official with the Food and Drug Administration.

“Innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what their technology can do today, not just what they hope it might do someday,” says an SEC official in a Wired article, Theranos and Silicon Valley’s ‘Fake It Till You Make It’ Culture.

DISPATCHES FROM THE NEW OPIUM WAR

The big story in healthcare today will be President Trump’s rollout of his plan to fight opioid abuse. He’ll announce his proposal in New Hampshire, which has had a terrible time with the opioid addiction epidemic. The Granite State had the third-highest rate of deaths from drug overdoses in 2016, according to the Centers for Disease Control and Prevention.

Only one possible part of Trump’s plan has gotten much attention: he suggests that people who sell drugs should get the death penalty. That dominated all the headlines today about the proposal. Other parts, which are said to include ideas related to prevention and drug addiction treatment, haven’t been made public, or have gotten little attention.

One that has been mentioned involves a plan to screen every federal inmate for opioid addiction and work to make sure inmates get treatment for that addiction.

Boston Globe

More from the Manchester Union Leader

GETTING YOUR TREATMENT AT THE APP STORE

The New York Times has an interesting story this morning about the latest in the effort to digitize medicine.

“Later this year, doctors treating patients addicted to substances like cocaine and amphetamines will be able to prescribe Reset, an app that gives patients lessons to help them modify their behavior. The Food and Drug Administration cleared it in September as the first mobile medical app to help treat substance-use disorders.” More from The New York Times

NOTES FROM THE AGE OF DISRUPTION: 

GM
Will begin building its autonomous Cruise AV in Michigan and commercialize next year LedeTree

Bear Flag Robotics
Is building an autonomous tractor. TechCrunch

Ford
Is investing in a 3-D printing startup. CNBC

Tata Motors and Indian Oil
Have rolled out a hydrogen fuel cell bus. LedeTree

Also coming up today:

AT&T, the nation’s largest telecom (one-third of Americans have AT&T as their wireless provider) heads to court today as it seeks to buy Time Warner, owner of HBO and CNN. The Department of Justice is on the other side of the court fight, seeking to stop the deal for antitrust reasons. USA Today calls it the biggest antitrust battle since a big company got broken up into smaller companies in a 1984 antitrust battle. That company was AT&T. More at USA Today

On this day in 2003, the Iraq War started with the bombing of Baghdad. Allen Newell, a pioneer of artificial intelligence research, was born on this day in 1927.

 

 

As always, I welcome your thoughts. @daveroyse on Twitter or dave.royse@ledetree.com

We’d love it if you’d follow us on Twitter and on Facebook for LedeTree news throughout the day.

 

 

 

 

About David Royse

David Royse
David Royse is the Editor-in-Chief of Ledetree.com. He has been a professional journalist for more than 20 years, including stints with The Associated Press and The News Service of Florida. He enjoys writing about health and medical science, and hopeful stories about scientific breakthroughs and new technology.

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