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Digital Tax Fight Emerges as Global Economic Threat

Westlake Legal Group 22dc-digitaltax-1-facebookJumbo Digital Tax Fight Emerges as Global Economic Threat Scholz, Olaf (1958- ) Organization for Economic Cooperation and Development Mnuchin, Steven T International Trade and World Market International Monetary Fund Group of Twenty Google Inc Georgieva, Kristalina Ivanova Facebook Inc Customs (Tariff) Corporate Taxes Amazon.com Inc

RIYADH, Saudi Arabia — The world’s top economic leaders warned on Saturday that an international tax fight between the United States and Europe poses a new threat to the global economy if a resolution is not reached this year.

After two years of economic fallout from a trade war between the United States and China, finance ministers and other senior officials at the Group of 20 meeting in Riyadh expressed alarm about an impasse over plans by foreign governments to impose new taxes on American technology companies. If a deal proves elusive in the coming months, European countries will begin collecting levies, which would probably set off retaliatory tariffs from the United States.

“The trade tensions of today would look like they are not so serious compared to the consequences of something like this,” Angel Gurría, secretary-general of the Organization for Economic Cooperation and Development, said in an interview on the sidelines of the G20 on Saturday. “There’s the cacophony, the trade tensions that would invariably follow, and then there’s the impact on growth.”

Several European countries, led by France, have been rolling out digital services taxes, which would hit American companies like Amazon, Google and Facebook. Italy, Spain, Austria and the United Kingdom have all announced plans for digital services taxes, which assess a levy based on the online activity that takes place in those countries, regardless of whether the company has a physical presence.

The O.E.C.D. has been trying to head off a proliferation of disparate tax regimes around the world and has been leading negotiations over the last year for an international overhaul that would allow countries to tax certain digital service providers even if they lack physical operations inside their borders.

Negotiators have set an end-of-year deadline to broker a deal that would set international standards for how, and where, online activity may be taxed. Also under discussion is whether to impose a global minimum tax of sorts on multinational corporations to discourage companies from shifting profits to low-tax countries like Ireland and Bermuda to minimize their tax bills.

The United States, along with the tech industry, has been eager to prevent a proliferation of new digital taxes across the world and has pushed for a global tax regime that would govern all O.E.C.D. countries.

But the talks hit a snag late last year when Treasury Secretary Steven Mnuchin told the O.E.C.D. that the United States wanted American companies to essentially have the option to avoid some of the taxes.

Some administration officials privately express concerns that the global minimum tax under discussion could discourage countries from further reducing their corporate tax rates, as the United States did in 2017. Lower rates, these officials argue, make their economies more attractive to global investment and help companies. Other economists say the competition to lower rates have encouraged firms to shift profits, at least on paper, to tax havens.

The economic impact of the digital services taxes on the United States is relatively small, but American companies fear the levies could evolve to hit a broader swath of sectors beyond tech. A recent analysis by the O.E.C.D. found that the international tax changes under consideration would increase global corporate taxes by about $100 billion.

The taxes have drawn the ire of President Trump, who has criticized Europe’s attempt to collect more taxes from American companies. Last year, Mr. Trump said the United States would retaliate against France’s digital tax by imposing tariffs of up to 100 percent on French products such as wine, cheese and handbags. The United States agreed last month to delay those tariffs and France agreed to delay collection of the taxes in the hope that a more global agreement could be reached.

European finance ministers expressed urgency on Saturday to reach an agreement, hoping to find common ground with the United States and avoid a broader economic conflict.

“Next year is coming very soon,” said Olaf Scholz, Germany’s finance minister. “There is not time to wait for elections.”

But major obstacles remain and the strong opposition to any plan that would allow American companies to opt out of taxes was palpable.

“Clearly, there is a need to avoid any kind of optional solution,” said Bruno LeMaire, the French finance minister. “I do not know of any private company that would choose to be taxed instead of not being taxed.”

Mr. Mnuchin tempered expectations that such a complicated deal could be reached so quickly.

“We are dealing with some of the most complicated international tax issues,” Mr. Mnuchin said during a panel discussion at the Ritz-Carlton Hotel. “In the U.S., depending upon what the solutions are, these may require congressional approval.”

Mr. Mnuchin reaffirmed his view that he believed the European digital services taxes were “discriminatory” but said he was committed to the multilateral process underway so that companies could have clarity over taxes in an increasingly digital economy.

The Treasury secretary also resisted the suggestion that the United States is proposing to make the tax optional, describing the proposal as a so-called “safe harbor” regime in which companies would agree to pay more in exchange for having more certainty over their tax bills.

Failure to reach agreement on either the digital tax or the global minimum tax could scuttle the entire package. Finance ministers from other nations have made clear to Trump administration officials that a large swath of countries will not agree to any deal that allows some large American companies to effectively pick their preferred tax system to minimize their global liability.

But the administration faces competing pressure at home, from businesses and lawmakers. Some multinational companies, including many tech giants, are eager for an agreement that would head off the complications of complying with different digital service taxes in a wide range of countries. Other companies fear the agreement would raise their taxes unexpectedly.

Any deal might need to be ratified by the Senate, where approval would be difficult in any event, but more so if a large group of powerful corporations oppose it.

Still, other countries have pressed the Trump administration to drop its so-called “safe harbor” demands and take a more active role in pushing negotiations toward consensus, starting with the finance ministers meeting this weekend.

The tussle over international taxes comes as the global economy is emerging from a year of sluggish growth made worse by uncertainty from Mr. Trump’s trade war with China and the disruption of global supply chains caused by American tariffs. While economists have projected a rebound this year, amid easing trade tension, the coronavirus outbreak in China represents a new variable that threatens to slow output.

Kristalina Georgieva, the managing director of the International Monetary Fund, said she currently thinks the virus could have a V-shaped impact on China’s economy, causing a sharp drop in growth followed by a rapid recovery with modest spillover to the rest of the world. But she acknowledged that the trajectory of the virus was not clear.

“We recognize that other scenarios could be significantly more impactful,” Ms. Georgieva said at a dinner in Riyadh sponsored by the Institute of International Finance.

The I.M.F. on Saturday downgraded its forecast for China’s economic growth this year by 0.4 percentage points to 5.6 percent and reduced its global growth outlook by 0.1 percentage points to 3.2 percent.

Tax experts who have been tracking the talks fear the chances of reaching a sweeping agreement by the end of the year are slim given the complex internal politics involved in brokering a deal with so many countries.

“The O.E.C.D. process is hanging by a thread and the consequences of failure are underappreciated by European sovereigns,” said Itai Grinberg, an international tax policy professor at Georgetown University Law Center.

If the talks do fail and European countries move ahead with their digital taxes, Mr. Grinberg said, the response from the United States would be forceful, particularly if Mr. Trump is re-elected in November.

“There is a high risk that the O.E.C.D. process is going to crater and that is what is driving the building bipartisan willingness to consider what the retaliatory measures by the United States would be,” he said.

Mr. Mnuchin did offer one option to avert such a fate on Saturday.

“If everybody adopts the U.S. proposal, I have 100 percent confidence we’ll get it done,” Mr. Mnuchin said, eliciting some laughter from his counterparts.

Alan Rappeport reported from Riyadh, Saudi Arabia, and Jim Tankersley from Washington.

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Digital Edits, a Paid Army: Bloomberg Is ‘Destroying Norms’ on Social Media

Westlake Legal Group 00bloombergmedia-facebookJumbo Digital Edits, a Paid Army: Bloomberg Is ‘Destroying Norms’ on Social Media twitter Social Media Presidential Election of 2020 Political Advertising Instagram Inc Google Inc Facebook Inc Bloomberg, Michael R

SAN FRANCISCO — In the first few months of his presidential campaign, Michael R. Bloomberg has been as aggressive on social media as President Trump was four years ago. But with a lot more money to spend.

Mr. Bloomberg has hired popular online personalities to create videos and images promoting his candidacy on social media. He is hiring 500 people — at $2,500 a month — to spend 20 to 30 hours a week recruiting their friends and family to write supportive posts. And his campaign has posted on Twitter and Instagram a flattering, digitally altered video of his debate performance last week in Las Vegas.

Through his money and his willingness to experiment, the billionaire former mayor of New York has poked holes in the already slapdash rules for political campaigns on social media. His digitally savvy campaign for the Democratic nomination has shown that if a candidate is willing to push against the boundaries of what social media companies will and won’t allow, the companies won’t be quick to push back.

“The Bloomberg campaign is destroying norms that we will never get back,” said Emerson Brooking, a resident fellow at the Atlantic Council’s Digital Forensic Research Lab, which studies disinformation. The campaign, he said, has “revealed the vulnerabilities that still exist in our social media platforms even after major reforms.”

On Friday, Twitter announced that it was suspending 70 pro-Bloomberg accounts for violating its policies on “platform manipulation and spam.” The accounts were part a coordinated effort by people paid by the Bloomberg campaign to post tweets in his favor.

Twitter’s rules state, in part, “You can’t artificially amplify or disrupt conversations through the use of multiple accounts,” including “coordinating with or compensating others” to tweet a certain message.

In response to Twitter’s move, the Bloomberg campaign issued a statement on Friday evening. “We ask that all of our deputy field organizers identify themselves as working on behalf of the Mike Bloomberg 2020 campaign on their social media accounts,” it said. The statement added that the tweets shared by its staff and volunteers with their networks went through Outvote, a voter engagement app, and were “not intended to mislead anyone.”

Social media companies have been under pressure since the 2016 presidential election. Over the last year or so, they have publicized a stream of new rules aimed at disinformation and manipulation. Facebook, Google and Twitter have created teams that look for and remove disinformation. They have started working with fact checkers to distinguish and label false content. And they have created policies explaining what they will allow in political advertisements.

Most social media companies have special rules that place elected officials and political candidates in a protected category of speech. Politicians are allowed much more flexibility to say whatever they want online. But the companies have had a hard time defining what is a political statement and what crosses the line into deception.

When Mr. Trump posted an altered video of Speaker Nancy Pelosi, Facebook and Twitter refused to take the video down. A 30-second video ad on Facebook in October falsely accused former Vice President Joseph R. Biden Jr. of blackmailing Ukrainian officials to stop an investigation of his son.

Mr. Bloomberg, a latecomer to the race, has poured hundreds of millions of dollars into it. As the owner of Bloomberg L.P., he has the money and the resources to vastly outspend his rivals.

Mr. Bloomberg has reassigned his employees and recruited other workers from Silicon Valley with salaries nearly double what other campaigns have offered their staffs. The roughly $400 million he has spent has made him omnipresent in ads across Facebook and Instagram, as well as on more traditional forms of media such as television and radio.

His campaign’s sophisticated understanding of how to generate online buzz has shown how uneven social media’s new political speech rules can be.

Mr. Bloomberg’s lackluster performance in the Las Vegas debate — three days before Saturday’s Democratic caucuses in Nevada — was startling even to his supporters. But soon after, his campaign’s digital team edited the debate into digestible bites on social media that made Mr. Bloomberg appear as though he had done better. On Thursday morning, a video was posted to his Twitter account.

“I’m the only one here, I think, that’s ever started a business. Is that fair?” Mr. Bloomberg said in the clip, showing him up on the debate stage. The video then cut to reactions from the other candidates, who appeared speechless. Crickets chirped in the background as the silence stretched on for 20 seconds.

In reality, Mr. Bloomberg had paused for about a second before moving on.

“It’s tongue in cheek,” Galia Slayen, a Bloomberg campaign spokeswoman, said of the video, which was viewed nearly two million times within hours. “There were obviously no crickets on the stage.”

Was the video against the rules?

Referring to new guidance on manipulated videos, Twitter said it would most likely label the video as misleading. That is, it would if the rule, which goes into effect in March, were already in effect. The company said it would not label Mr. Bloomberg’s video retroactively.

Facebook, which owns Instagram, said it would not remove the video. The company has recently altered its policy on manipulated media to state that Facebook will remove videos that have been edited “in ways that aren’t apparent to an average person and would likely mislead someone into thinking that a subject of the video said words that they did not actually say.”

The companies are less certain of how they will handle Mr. Bloomberg’s hiring of 500 “deputy digital organizers” to recruit and train their friends. (All 500 haven’t been hired yet.) His campaign has said it is paying people to use their own social media accounts to publish content of their choosing to mobilize voters for Mr. Bloomberg.

“We are meeting voters everywhere on any platform that they consume their news. One of the most effective ways of reaching voters is by activating their friends and network to encourage them to support Mike for president,” said Sabrina Singh, a spokeswoman for the Bloomberg campaign.

The Bloomberg team said the people they hired were ordinary Americans, and would not include so-called social media influencers, or individuals with large social media followings. The campaign said the digital organizers would not add disclosures to every post, but they would be directed to clearly identify in their social media profiles that they were affiliated with the Bloomberg campaign.

“We recommend campaign employees make the relationship clear on their accounts,” said Liz Bourgeois, a spokeswoman for Facebook. But if Mr. Bloomberg’s employees do not make clear on their accounts that the campaign paid them, Facebook has no easy way to identify them, she said.

Facebook has also made it clear that influencers who post content in support of Mr. Bloomberg’s campaign must clearly label themselves as being sponsored. The company also is exploring ways in which it can identify and catalog sponsored political content.

Google, which owns YouTube, did not respond to a request for comment on how it plans to handle paid influencers as well as digital organizers working for the Bloomberg campaign.

Mr. Brooking and other social media experts said they believed that until the companies saw themselves as media organizations — not neutral internet platforms — they would continue to struggle with how to police their platforms.

“We would not tolerate a falsified, unattributed political ad on CNN. We would not tolerate a paid campaign staffer masquerading as an objective analyst on NBC,” Mr. Brooking said. “We should not tolerate these behaviors on Twitter and Facebook today.”

Sheera Frenkel reported from San Francisco, and Davey Alba from New York.

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Europe, Overrun by Foreign Tech Giants, Wants to Grow Its Own

Westlake Legal Group 19europe-digital-facebookJumbo Europe, Overrun by Foreign Tech Giants, Wants to Grow Its Own von der Leyen, Ursula Facebook Inc European Union E-Commerce Computers and the Internet Artificial Intelligence Apple Inc Amazon.com Inc

LONDON — Across the digital economy, Europe has been missing.

Apple, based in California, and Samsung, from South Korea, make the most popular phones in Europe. Facebook owns the most widely used social networks, Google dominates online search and advertising, and Amazon controls e-commerce. European companies run their businesses on cloud infrastructure from Amazon and Microsoft. The region’s wireless networks are largely made with equipment from the Chinese giant Huawei.

The European Union on Wednesday outlined an attempt to restore what officials called “technological sovereignty,” seeking tougher regulation of the world’s biggest tech platforms, new rules for artificial intelligence, and more public spending for the European tech sector.

Officials said the effort is a “generational project,” and the ideas reflect a growing concern among European leaders that countries in the region are overly dependent on services provided by companies based elsewhere. With the global economy becoming ever more centered around technology, European countries would have a harder time creating jobs and generating tax revenue to fund government services.

“We want to find European solutions in the digital age,” Ursula von der Leyen, the president of the European Commission, the executive branch of the European Union that is crafting the policy, said at a news conference in Brussels.

But the proposals introduced on Wednesday were clearer in identifying the problem than proposing specific solutions. The commission said it would begin a consultation period that will take months before any concrete legal proposals are ready. The debate is expected to last through much of the year.

Officials laid out some broad ideas, to be debated in the months ahead, that suggest authorities will seek to nurture homegrown businesses by taking on the giants from overseas — potentially setting up more trade disputes with Washington.

Companies that have become “gatekeepers” between businesses and customers — like Amazon for shopping, Apple’s App Store, Facebook’s social network and Google’s search engine — will face more scrutiny. A particular focus, officials said, will be on the data they hold that could give them an unfair advantage over rivals.

Artificial intelligence technology — in which computers are being trained to perform increasingly complex tasks — would also receive fresh government oversight, especially where the automated systems create harmful risks, such as in health, transportation and policing. The commission said artificial intelligence systems in these “high risk” areas would have to be independently tested and certified before they could be used in the 27 countries of the European Union.

“A.I. is not good or bad in itself,” Margrethe Vestager, the European Commission vice president who oversees the digital policy, said at a news conference in Brussels. “It all depends on why and how it is used.”

Ms. Vestager called for more scrutiny of how facial recognition technology was being deployed across Europe.

Policymakers also outlined standards for industries to share data within the European Union, making it easier for companies and researchers to pool information they collect to better compete against the tech companies that control much of the world’s data.

Europe’s ability to establish itself as tech-industry leader will be very difficult in the face of competition from companies in the United States and China that may have more experience and resources, said Kevin Allison, who studies the intersection of technology and geopolitics at Eurasia Group in Berlin.

“It is one thing to have ideas; it is one thing to even have a well-thought strategy — but implementing and executing the ideas is the really hard part,” said Mr. Allison. “It’s where Europe has struggled.”

Mr. Allison said Europe’s proposals could face resistance in Washington, where there were threats of retaliation by the Trump administration against a French effort to tax American tech giants. “This is just going to further fuel U.S. concerns about Europe,” he said.

The debate has gotten the attention of the tech giants. Mark Zuckerberg, Facebook’s top executive, was in Brussels on Monday to meet with officials about the proposals. Top executives from Apple, Google and Microsoft have also visited the European capital over the past several weeks.

The proposal leaves many questions unanswered, including whether the European Union will seek to regulate harmful internet content, a contentious topic that raises concerns about free expression online. Some leaders in Brussels would like to hold companies like Facebook, Google and Twitter more accountable by removing some of the protections that keep them from being held legally liable for user-generated posted on their platforms.

Europe has been a world leader in technology regulation, including privacy and antitrust, influencing how countries elsewhere are reacting to the power and influence of the world’s biggest tech platforms. But as Europe has created a reputation as the world’s most aggressive watchdog of Silicon Valley, it has failed to nurture its own tech ecosystem. That has left countries in the region increasingly dependent on companies that many leaders distrust.

In Europe, the effort to support the local tech industry is part of a broader debate about the role the government should play in giving European businesses an advantage over foreign competitors. While officials in some countries, including France, Germany Italy and Poland, have called for more state intervention in the economy, others, including Ms. Vestager, have been more wary.

Priya Guha, who works at the venture capital firm Merian Ventures and was previously the British government’s top liaison to Silicon Valley, said Europe was attempting to balance the potential harms of modern technology while bolstering its position in the digital economy.

“Europe is trying to consider the impact on society whilst maximizing the benefits,” she said.

Adam Satariano reported from London, and Monika Pronczuk from Brussels.

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Silicon Valley Heads to Europe, Nervous About New Rules

Westlake Legal Group 00europe-ai1-facebookJumbo Silicon Valley Heads to Europe, Nervous About New Rules Vestager, Margrethe Research Regulation and Deregulation of Industry Google Inc Facebook Inc European Union European Commission Computers and the Internet Brussels (Belgium) Artificial Intelligence Apple Inc

LONDON — First came Sundar Pichai, the chief executive of Google’s parent company, Alphabet. Then Apple’s senior vice president for artificial intelligence, John Giannandrea, showed up.

And on Monday, Mark Zuckerberg, Facebook’s chief executive, is joining in with his own trip to Brussels to meet with officials like Margrethe Vestager, the executive vice president of the European Commission.

The main reason so many Silicon Valley executives are paying court in the European Union’s capital: E.U. lawmakers are debating a new digital policy, including first-of-its-kind rules on the ways that artificial intelligence can be used by companies. That has far-reaching implications for many industries — but especially for tech behemoths like Google, Facebook and Apple that have bet big on artificial intelligence.

“While A.I. promises enormous benefits for Europe and the world, there are real concerns about the potential negative consequences,” Mr. Pichai said in a speech last month when he visited Brussels. He said regulation of artificial intelligence was needed to ensure proper human oversight, but added “there is a balance to be had” to ensure that rules do not stifle innovation.

Silicon Valley executives are taking action as Europe has increasingly set the standard on tech policy and regulation. In recent years, the E.U. has passed laws on digital privacy and penalized Google and others on antitrust matters, which has inspired tougher action elsewhere in the world. The new artificial intelligence policy is also likely to be a template that others will adopt.

Artificial intelligence — where machines are being trained to learn how to perform jobs on their own — is seen by technologists, business leaders and government officials as one of the world’s most transformative technologies. Yet it presents new risks to individual privacy and livelihoods — including the possibility that the tech will replace people in their jobs.

A first draft of the artificial intelligence policy, which is being coordinated by Ms. Vestager, will be released on Wednesday, along with broader recommendations outlining the bloc’s digital strategy for the coming years. The debate over the policies, including how to expand Europe’s homegrown tech industry, is expected to last through 2020.

The artificial intelligence proposal is expected to outline riskier uses of the technology — such as in health care and transportation like self-driving cars — and how those will come under tougher government scrutiny.

In an interview, Ms. Vestager said artificial intelligence was one of the world’s most promising technologies, but it presents many dangers because it requires trusting complex algorithms to make decisions based on vast amounts of data. She said there must be privacy protections, rules to prevent the technology from causing discrimination, and requirements that ensure companies using the systems can explain how they work, she said.

She raised particular concerns about the expanding use of facial recognition technology and said new restrictions might be needed before it was “everywhere.”

Ms. Vestager said she was looking forward to Mr. Zuckerberg’s visit. While she was curious to hear his ideas about artificial intelligence and digital policy, she said, Europe was not going to wait to act.

“We will do our best to avoid unintended consequences,” she said. “But, obviously, there will be intended consequences.”

Facebook declined to comment.

Europe is working on the artificial intelligence policy at the direction of Ursula von der Leyen, the new head of the European Commission, which is the executive branch for the 27-nation bloc. Ms. von der Leyen, who took office in November, immediately gave Ms. Vestager a 100-day deadline to release an initial proposal about artificial intelligence.

The tight time frame has raised concerns that the rules are being rushed. Artificial intelligence is not monolithic and its use varies depending on the field where it is being applied. Its effectiveness largely relies on data pulled from different sources. Overly broad regulations could stand in the way of the benefits, such as diagnosing disease, building self-driving vehicles or creating more efficient energy grids, some in the tech industry warned.

“There is an opportunity for leadership, but it cannot just be regulatory work,” said Ian Hogarth, a London-based angel investor who focuses on artificial intelligence. “Just looking at this through the lens of regulations makes it hard to push the frontiers of what’s possible.”

Europe’s A.I. debate is part of a broader move away from an American-led view of technology. For years, American lawmakers and regulators largely left Silicon Valley companies alone, allowing the firms to grow unimpeded and with little scrutiny of problems such as the spread of disinformation on social networks.

Policymakers in Europe and elsewhere stepped in with a more hands-on approach, setting boundaries on privacy, antitrust and harmful internet content. Last week, Britain unveiled plans to create a new government regulator to oversee internet content.

“Technology is fragmenting along geopolitical lines,” said Prof. Wendy Hall, a computer scientist at Southampton University, who has been an adviser to the British government on artificial intelligence.

In the interview, Ms. Vestager compared Europe’s more assertive stance in tech regulation to its regulations of agriculture. Many pesticides and chemicals that are allowed in the United States are banned in Europe.

“It is quite the European approach to say if things are risky, then we as a society want to regulate this,” she said. “The main thing is for us to create societies where people feel that they can trust what is going on.”

European policymakers have no shortage of ideas to wade through in drafting the artificial intelligence policy. Since 2018, 44 reports with recommendations for “ethical artificial intelligence” have been published by various organizations, according to a PricewaterhouseCoopers report.

In the United States, the government has focused on providing research funding for artificial intelligence rather than drafting new regulations. This month, the latest White House budget proposal earmarked roughly $1.1 billion for such research.

Ms. Vestager said her policy would include a boost to research funding, but also a framework for safeguarding areas where artificial intelligence can cause the most harm. She said she was not worried about how artificial intelligence is used to recommend a song on Spotify or a movie on Netflix, but was focused on algorithms that determined who gets a loan or what diseases are diagnosed.

Many details will likely be fought over, such as how Europe intends to meet its goal of maximizing the benefits of artificial intelligence. Civil society groups, banks, carmakers and health providers are expected to weigh in.

The rules will have important consequences for Apple, Facebook and Google. The tech giants have invested heavily in artificial intelligence in recent years and have battled to hire the world’s top engineers. Artificial intelligence is now in Apple products such as Siri and Face ID, helps power Google’s search engine and self-driving cars, and Facebook’s advertising business.

Apple declined to comment. A Google spokesman referred back to the comments made by Mr. Pichai.

During Mr. Pichai’s visit to Brussels last month, he was asked what the region’s artificial intelligence rules should look like. He warned there would be lasting economic consequences if Europe did too much.

“The ability of European industry to adopt and adapt A.I. for its needs is going to be very critical for the continent’s future,” he said. “It’s important to keep that in mind.”

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Britain to Create Regulator for Internet Content

Westlake Legal Group 00ONLINEHARMS-facebookJumbo Britain to Create Regulator for Internet Content YouTube.com Regulation and Deregulation of Industry Politics and Government Great Britain Freedom of Speech and Expression Facebook Inc Computers and the Internet Censorship Antitrust Laws and Competition Issues

LONDON — Britain on Wednesday introduced a plan that would give the government more latitude to regulate internet content, as part of an effort to force Facebook, YouTube and other internet giants to do more to police their platforms.

The government said the country’s media regulator, known as Ofcom, would take on new responsibilities monitoring internet content, and would have the power to issue penalties against companies that do not do enough to combat “harmful and illegal terrorist and child abuse content.”

Left unanswered were many details, including what penalties the new regulator would have at its disposal or how it would keep tabs on the billions of pieces of user-generated content that are posted on the social media platforms.

A proposal circulated by the government last year suggested that the regulator could issue fines, block access to websites, and make individual executives legally liable for harmful content spread on their platforms.

The government said further details would be released in the spring.

“We will give the regulator the powers it needs to lead the fight for an internet that remains vibrant and open but with the protections, accountability and transparency people deserve,” said Nicky Morgan, the secretary of Department for Digital, Culture, Media and Sport, the agency that announced the proposal on Wednesday.

The push for tougher regulation shows a divergence from the American-driven vision of the internet that is largely market-driven and free of government oversight. In Europe and in Britain, where free speech is more regulated than in the United States, there has been a growing willingness to impose new rules on the web, particularly related to hate speech, terrorism and material targeting children.

In Germany, companies risk fines if hate content is not removed in as little as 24 hours. France is considering a similar proposal. The European Union is also debating changes to laws that protect internet companies from being liable for content posted on their platforms.

Free speech and human rights advocates warned the policies would lead to censorship and be used as a template by more repressive governments.

Europe has been targeting the tech industry for years over growing concerns that American tech giants have too much power and influence. A sweeping privacy law enacted in 2018, called the General Data Protection Regulation, limits what personal information can be collected and shared online. Enforcement of European Union antitrust laws has resulted in billions of dollars in penalties against Google, Apple, Amazon and others for anticompetitive behavior.

Prof. Wendy Hall, a computer scientist at Southampton University in England, said the British proposal showed how the internet was fracturing around the world, with different regions adopting different standards. At one end, she said, is the American approach that lacks regulation and is largely market-driven; at the other sits China’s top-down government control and censorship.

Professor Hall said that Europe was attempting to find a middle path, but that democratic governments must tread carefully because judging what is acceptable online is often very subjective.

“There’s not an easy solution if you’re not an authoritarian government,” said Professor Hall, who has served as a government policy adviser on the use of artificial intelligence.

The British proposal is the first step toward building on recommendations that officials introduced last year to regulate the web. The regulations to be debated in the months ahead will apply to internet platforms that carry user-generated content, including Facebook, Instagram, Twitter and YouTube.

Placing Ofcom in charge of internet-content regulation adds to the agency’s responsibilities overseeing Britain’s television networks, radio stations and newspapers, as well as country’s internet service providers.

Child-protection groups have pushed for the regulations, arguing that too much harmful content is available to young people.

“The government has today signaled they are willing to stand up to Silicon Valley and commit to landmark British regulation that could set a global standard in protecting children online,” Peter Wanless, the chief executive of the National Society for the Prevention of Cruelty to Children, said in a statement.

In Britain, the handling of the tech industry presents a dilemma. Prime Minister Boris Johnson has said that the sector is critical to the country’s economic future outside the European Union, but his government is also attempting tighter oversight. Antitrust regulators have vowed to clamp down on anticompetitive behavior by big online platforms. And the country’s top privacy regulator is investigating the internet advertising industry.

Many who work in the tech industry are concerned the rules will have unintended consequences, particularly for start-ups that don’t have the financial or legal resources to navigate a more complex regulatory environment.

“It becomes a moat for them,” said Rob Kniaz, a partner at the venture capital firm Hoxton Ventures in London. “These things always favor the incumbents.”

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She Wants to Break Up Big Everything

Westlake Legal Group 00trustbuster1-facebookJumbo She Wants to Break Up Big Everything United States Politics and Government Open Markets Institute Miller, Sarah Mergers, Acquisitions and Divestitures Google Inc Facebook Inc Economic Conditions and Trends Apple Inc Antitrust Laws and Competition Issues Amazon.com Inc

WASHINGTON — One night five years ago, Sarah Miller, a former Treasury Department aide, was trying to make sense of an economic recovery that had left the country in the grips of rising inequality.

Thinking back to recent news articles about corporate mergers, she Googled “monopolies in America.” Her screen filled with links to articles detailing a nascent school of thinking that corporate concentration was to blame for inequality, and that a century-old approach to antitrust laws could help solve it.

As she read more, she felt she had found the absent piece of a puzzle. “This is probably a big deal,” Ms. Miller, now 37, remembered thinking.

It is now common to hear Democratic presidential candidates argue that tech companies like Facebook and Google are too powerful. The Trump administration, too, is investigating whether those businesses, as well as Apple and Amazon, have violated antitrust laws.

Ms. Miller has been central in making the issue prominent. From her onetime seat as the deputy director of the Open Markets Institute, a research and advocacy group focused on antitrust, she spent three years as a thorn in Silicon Valley’s side, guiding a coalition of liberal groups that demanded federal officials break up Facebook.

Now there’s opportunity to ratchet up the pressure on policymakers even more, Ms. Miller said. So she left Open Markets at the beginning of this year to lead the American Economic Liberties Project, a new organization dedicated to pushing government to confront corporate concentration.

The organization is aiming to spend $3 million in its first year, funded by philanthropic organizations including the Omidyar Network, linked to eBay founder Pierre Omidyar.

Ms. Miller is part of a broader movement among those on the left targeting corporate power, which is reaching a pivotal moment as Democratic presidential candidates like Senator Elizabeth Warren of Massachusetts call for the breaking up of the tech giants. Riding that wave, Ms. Miller and her fellow activists have an ambitious goal: to rewire the American economy by targeting the biggest companies in many industries, from tech to agriculture to medicine.

“The conversation about concentrated economic power is now firmly established within the political narrative and the elite media narrative,” she said. “We’re in a position where we need to start seriously crafting regulatory and policy responses to specific problems, specific markets, specific corporate actors.”

American antitrust policy has long placed the interests of consumers above those of smaller rivals — often as measured by what a product costs — a restrained approach that has allowed companies to grow into trillion-dollar giants. But that consensus is shifting among economists and policymakers.

Still, Ms. Miller and her colleagues are threading a narrow political needle. The push for bold antitrust action faces resistance from many on the right, who argue that people like Ms. Miller exaggerate the problem they identify — and demand excessive solutions.

“The claim that across the board you’re seeing a diminution of competition in our economy because of lack of antitrust enforcement is overstated,” said Daniel Crane, a professor at the University of Michigan’s law school. He added that “breaking up existing companies is not a great way to start” or “terribly feasible from a legal perspective.”

The antitrust movement also has to build more support on the left.

K. Sabeel Rahman, the president of Demos, a progressive think tank, said the antitrust movement needed “a much better articulation of what the links are between concentrated corporate power and questions of racial equity and racial justice.”

Ms. Miller said she disagreed with the criticism from the right.

“If you look at meat processing, if you look at media, if you look at plagiarism detection software, if you look at baby formula, if you look at pacemakers, everywhere you look you see markets that have been rolled up and monopolized,” Ms. Miller said.

But she concurred with those on the left that making racial justice a part of the call for antitrust reforms was vital. She said her new group would engage in conversations “with groups that look at work through a civil rights lens” as it tapped into a populist anger that emerged from the financial crisis of 2008.

Ms. Miller spent 2010 to 2012 working for the Treasury Department as it managed the recovery. She said she had found herself “confused” and “dissatisfied” by what she saw as the department’s failure to help homeowners while shoring up big banks.

“A lot of the values that I’d seen, I didn’t share with people in positions of power there,” she said.

Her political education began before the crisis, on Hillary Clinton’s 2008 presidential campaign. After Mrs. Clinton dropped out of the race, Ms. Miller was hired by John Podesta, the Democratic power broker who was leading the Center for American Progress, one of Washington’s most influential progressive groups.

There, she met her eventual husband, Faiz Shakir, who was running the organization’s blog, ThinkProgress. Mr. Podesta officiated at their wedding. Mr. Shakir now manages the Democratic presidential campaign of Senator Bernie Sanders of Vermont.

In 2015, Ms. Miller’s nighttime Google search, made after reading about corporate mergers, led her to the work of Barry Lynn.

A former reporter, Mr. Lynn had argued for years that corporate consolidation, urged on by conservative economic policies, was harming Americans — and that antitrust law was the solution. By 2015, he was running a program at New America, a progressive think tank. Ms. Miller got in touch with him.

She joined his team in 2017, as Mr. Lynn’s program was becoming independent and was renamed the Open Markets Institute. It now brings in millions of dollars in funding a year and has been credited for an outsize role in putting antitrust on the map.

The movement had already become adept at producing influential journalism and research, and had built some relationships with policymakers. Ms. Miller brought more muscle to the organization’s public campaigning, helping to lead an anti-Facebook coalition.

The coalition, called Freedom From Facebook, bought an ad in 2018 in the Massachusetts Institute of Technology’s campus newspaper when the social network’s chief operating officer, Sheryl Sandberg, delivered the institution’s commencement speech. It protested a company executive at a congressional hearing. At one point, a Facebook consulting firm distributed opposition research suggesting that the campaign was funded by the financier George Soros.

Mr. Lynn said Ms. Miller’s new group was an outgrowth of that public outreach work — and part of the broader efforts to build a long-term movement to critique corporate power.

“It’s like, let 1,000 flowers bloom,” he said.

Ms. Miller and her colleagues at the American Economic Liberties Project are now looking for any opportunity to translate the attention on corporate concentration into sustained momentum for their cause. They hope to organize small businesses harmed by big companies, build links between concentration and national security issues and help a potential new Democratic administration staff up. The team includes Matt Stoller, a longtime Open Markets fellow who has focused his writing — and sometimes pugilistic Twitter persona — on the monopoly issue.

Last month, Ms. Miller met with roughly half a dozen members of her staff in a WeWork conference room, about a block from the Treasury Department, to prepare to publicly launch their group. A spreadsheet, displayed on a television screen, showed the projects the team had in the works.

One staff member suggested highlighting how the coronavirus outbreak would strain highly concentrated medical supply chains carrying goods from China to the United States. Another updated the group on proposed federal guidelines for evaluating mergers and other activity at the Justice Department and the Federal Trade Commission.

Eventually, the conversation turned to a report the group was producing: a series of graphics showing that different brands of a certain product — like eyeglasses or coffee — were, in fact, owned by a small number of conglomerates.

The graphics represented the group’s hope that people will understand how concentration affects their lives — and be moved to do something about it.

“Let’s just wonder at it for a minute,” Ms. Miller said.

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He Combs the Web for Russian Bots. That Makes Him a Target.

Westlake Legal Group 00disinfo-nimmo-facebookJumbo He Combs the Web for Russian Bots. That Makes Him a Target. YouTube.com twitter Social Media Russian Interference in 2016 US Elections and Ties to Trump Associates Rumors and Misinformation Presidential Election of 2016 Politics and Government Facebook Inc elections Cyberwarfare and Defense Computers and the Internet Ben Nimmo

HADDINGTON, Scotland — In August 2017, Ben Nimmo was declared dead by 13,000 Russian bots on Twitter.

“Our beloved friend and colleague Ben Nimmo passed away this morning,” read the epitaph, which was manipulated to look as if it were from a co-worker’s Twitter account. “Ben, we will never forget you.”

The message was immediately shared thousands of times by the network of automated accounts. Notes began pouring in from worried friends and colleagues — even though Mr. Nimmo was very much alive.

It didn’t take long for Mr. Nimmo, who helped pioneer investigations into online disinformation, to figure out what was going on: He had been targeted by a shadowy group after reporting, along with others, that American far-right groups had adopted pro-Kremlin messages on social media about Ukraine. His fake death notice was a sinister attempt at disinformation, which is the spreading of falsehoods with the deliberate intent to mislead.

“That made it personal,” said Mr. Nimmo, 47, whose home address in a town near Edinburgh and other personal data, like bank details, have also been posted online.

For the last five years, Mr. Nimmo, a founder of the Atlantic Council’s Digital Forensic Research Lab, has been a leader of a small but growing community of online sleuths. These researchers serve as an informal internet police force that combats malicious attempts to use false information to sway public opinion, sow political discord and foment distrust in traditional institutions like the news media and the government.

Mr. Nimmo’s work came to the fore after the 2016 American presidential election, when intelligence agencies concluded that Russia had used Facebook and other internet platforms to influence voters. His research has since caused Facebook and other companies to ban thousands of disinformation-related accounts; he has also been tapped as an expert by governments studying foreign interference.

Now his skills are needed more than ever, as the 2020 presidential election approaches and the tactics of internet trickery have been adopted by governments, activist groups and clickbait farms in at least 70 countries. In tandem, a disinformation-for-hire industry has emerged. And domestic disinformation efforts in the United States are also on the rise.

“It doesn’t matter how much money you throw at the problem, or how many technological advances you have,” said Jenni Sargent, managing director of First Draft, a London group that tracks disinformation and trains journalists. “Without the human layer of someone like Ben dissecting the way that people use the internet, then we wouldn’t be as far ahead as we are in terms of understanding the problem and the scale.”

Mr. Nimmo’s goal is to spot disinformation early — essentially, to stamp out the fire before it spreads.

His techniques have changed as his adversaries have become more cunning. Because Facebook, Twitter and YouTube are now policing their platforms more aggressively, he is less able to rely on obvious clues like masses of automated Twitter posts and fake Facebook accounts.

So Mr. Nimmo has started looking for clues in obscure areas of the internet, like German news sites that accept unverified user-generated content and Iranian video-sharing services. Websites like Reddit, Medium and Quora are becoming popular places to create fake accounts and plant disinformation and leaks.

“Every time we catch a threat actor, you can bet that the other ones will change their tactics to try and keep ahead,” he said.

More interference is coming in the 2020 campaigns, Mr. Nimmo said. He said he was particularly worried about a “hack-and-leak” operation like the one in 2016 when Russian operatives took information from the Democratic National Committee’s servers and got it published online. Loaded with juicy and accurate information, such leaks go viral on social media and can be irresistible to the news media.

Mr. Nimmo’s path to disinformation research was not an obvious one. An Englishman who studied literature at Cambridge University, he worked as a scuba diving instructor in Egypt, as well as a travel writer and journalist in Europe. In 2007, while reporting on violent demonstrations in Estonia for Deutsche Presse-Agentur, he was head-butted by a protester, breaking his nose and leaving it off center still today.

In 2011, he began working at the North Atlantic Treaty Organization as a press officer. While there in 2014, he saw how Russia had worked to muddy perceptions of its invasion of Crimea that year, including misrepresenting Russian soldiers as “local self-defense forces.”

“There was this constant drumbeat of Russian disinformation,” he said.

Inspired to dig deeper, he became an independent researcher that same year. He moved to Scotland to be closer to family and began doing contract work on Russia for pro-democracy think tanks like the Institute for Statecraft.

During the 2016 American election campaign, Mr. Nimmo helped found the Atlantic Council’s Digital Forensic Research Lab, a Washington-based group that studies online disinformation. Facebook made him and the lab among the first outsiders allowed to study disinformation networks on its site before the company shut the networks down.

Last year, Mr. Nimmo became the head of investigations for the social-media monitoring company Graphika.

“He was there well before this was a trendy thing to do,” said Alex Stamos, who is conducting similar disinformation research work at Stanford University and was previously Facebook’s chief security officer. Both Graphika and the Digital Forensic Research Lab have received funding from Facebook.

Mr. Nimmo works from his home atop a hill and next to a grain farm in the small Scottish town of Haddington. To ferret out disinformation networks, he relies on open-source digital tools: the Wayback Machine to find internet pages that have been deleted; Amnesty International’s Citizen Evidence Lab, which provides information about YouTube videos; and Sysomos for spotting social media trends.

What is hard, he said, is determining when material is coming from regular people expressing a point of view or from a coordinated system linked to a government. One giveaway is when the same material is posted at the same time, or when it can be traced to an original post — “patient zero,” he said — known to be a website or social media account used by a government.

“The magic of the internet is there is always another clue to find,” he said.

Mr. Nimmo speaks fluent Russian, French, German and Latvian — and is conversant in several other languages — teaching himself by buying books in the “Lord of the Rings” trilogy in languages he is trying to learn. That makes it easier for him to spot clues like mistakes a native Russian speaker makes when writing in English in disinformation posts.

The amount of disinformation has increased recently. In October, Mr. Nimmo’s team at Graphika explained how pro-China propaganda accounts targeted Hong Kong demonstrators. In November, he helped expose an operation that used fringe platforms to leak a sensitive British trade document before Britain’s general election. And in December, he analyzed Facebook’s first big takedown of fake accounts with profile pictures generated by artificial intelligence.

Most recently, he has investigated Iranian disinformation after the United States killed the head of Iran’s security machinery, Maj. Gen. Qassim Suleimani, last month. Mr. Nimmo is also tracing Russia-linked campaigns, including an effort to blame the United States for the downing of Ukraine International Airlines Flight 752, which Iran said it mistakenly shot down last month, killing 176 people.

This past week, after technical problems delayed the reporting of results from the Iowa caucuses, Mr. Nimmo was on alert for disinformation. There was little, he said, and he mainly found gleeful trolling from Republican supporters and right-wing groups.

Mr. Nimmo has sometimes made mistakes in identifying culprits. In 2018, he pinpointed a number of Twitter accounts as “Russian trolls,” when one of them was a British citizen sympathetic to Russia.

One recent evening, he started work at 7, chasing leads on Iranian disinformation related to the killing of General Suleimani. One suspicious Twitter account provided clues that led to various YouTube videos. From there, Mr. Nimmo found links to Facebook and Instagram pages. After a few hours, he had traced how memes from a suspicious pro-government Iranian website had traveled elsewhere on the web.

By the time Mr. Nimmo went to bed after 2 a.m., he had more than 50 tabs open on his browser, but no definitive evidence of an Iranian government campaign.

“He’s very careful,” said Camille François, the chief innovation officer at Graphika, who hired Mr. Nimmo. “It’s important to detect them, and to study them, but it’s also important not to overreact to the threat.”

That’s especially true now that foundations, universities and companies have poured money into efforts to examine disinformation, luring new researchers eager to spot such activity. Mr. Nimmo said he was concerned that investigators could have an incentive to sensationalize material that cannot be accurately attributed and argued that new standards were needed.

“When we look back on 2020, I hope we’ll see it as the year when disinformation research passed the tipping point and really started becoming a mainstream discipline,” he said. “We need to make that happen, because the threat actors aren’t going away.”

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Maybe Information Actually Doesn’t Want to Be Free

Westlake Legal Group 07JESSICALESSIN-01-facebookJumbo Maybe Information Actually Doesn’t Want to Be Free Zuckerberg, Mark E Wall Street Journal Venture Capital Start-ups Silicon Valley (Calif) San Francisco (Calif) Newspapers News and News Media Murdoch, James R Mergers, Acquisitions and Divestitures Lessin, Jessica E Jobs, Laurene Powell Hoffman, Reid Garrett High Net Worth Individuals Harvard University Freedom of the Press Financial Times Facebook Inc Entrepreneurship Ek, Daniel Computers and the Internet Chesky, Brian Caldbeck, Justin Binary Capital airbnb 21st Century Fox

SAN FRANCISCO — Jessica Lessin thinks the biggest story of the moment — how tech is swallowing the universe — is hopelessly under-covered by the news media. The issue is “massive,” she said not long ago in her spare, cube-like office here, and “no one is paying attention.”

Of course, it can be hard to see the forest for the tweets. From analysis of Trump’s utterances to conspiracy-peddling publishers amplifying themselves on Facebook and YouTube, tech stories increase exponentially every day. But Ms. Lessin, founder of The Information, an influential Silicon Valley publication, thinks most reporters are still focusing on the wrong topics: glamorous cryptocurrency, for example, rather than the blockchain looming over bank loans and stock trades; or the number of cars sold, rather than the artificial intelligence and driver networks that threaten to make that number obsolete.

She has focused her site on the larger picture, pursuing industry scoops and keeping the publication ad-free, instead charging $399 a year for complete access. The Information achieved profitability in 2016, Ms. Lessin said, three years after she left The Wall Street Journal to start it. She added that she expected $20 million in sales by the end of 2020, and for her staff of two dozen reporters and editors in the Bay Area, Seattle, Los Angeles, New York, Washington and Hong Kong to grow. “The fact that we have a business that’s scaling makes me excited,” she said.

This sense of hope is discordant with the rest of online media, which seems in grim shape — last year, more than 1,000 people were laid off at BuzzFeed, AOL, Yahoo, HuffPost and Vice Media. (BuzzFeed is now back on more solid footing and could be headed for a sale.)

As other online organs have bloated and intermittently fasted, The Information’s reporters have become known in Silicon Valley for sniffing out the industry’s misdeeds and tweaking its powerful. A 2017 story revealed sexual harassment allegations against a venture capitalist that led to the shutdown of his firm. A recent article revealing hidden financial data at Quibi, a new streaming service, prompted its chief executive, Meg Whitman, to compare reporters to sexual predators. (She later apologized.)

The Information is sparely, almost clinically designed and frequently refreshed. Subscribers include Amazon’s founder, Jeff Bezos, and the media investor James Murdoch (“Please write nice things about her,” he said of Ms. Lessin), corporate clients like Google and Goldman Sachs, and most of start-up royalty. Laurene Powell Jobs, the world’s seventh wealthiest woman and an influential philanthropist who also owns The Atlantic, finds the site useful. It covers “an ecosystem and an industry I care about,” she said, adding, “I’ve followed Jessica’s byline since The Journal.”

Ms. Lessin, 36, is the rare editor to have risen from ink-stained wretch to a player, much like Peter Bart when he ruled Variety, or Anna Wintour of Vogue. But her success, unlike the editors’ of an earlier time, owes as much to the data-driven discipline of her business as her editorial tastes. In an era when many pay walls, if they exist at all, are easily scaled, Ms. Lessin is fiercely guarding the fortress.

“I’ve said this from the beginning,” she said, “and I continue to say this, but you can’t give away what you expect the reader to find valuable.”

Ms. Lessin’s instinct for tradecraft showed up before the internet was ubiquitous, when she was editor of The Greenwich Academy Press, the half-size broadsheet of her private high school, and wanted to publish it in full color. To raise the money, she persuaded the school to allow her to auction off parking spots. “I just really wanted it to look as big and professional as possible,” she recalled.

While attending Harvard, she scored the coveted faculty beat at the Crimson newspaper. “It was like covering Congress,” Ms. Lessin said. “It’s fun because you get the bickering and the politics.” Lauren Schuker Blum, a friend who worked with her there and later at The Journal, remembered Ms. Lessin’s work habits. “We all had these reporter notebooks and most of us would use like half of it, or lose it, but she had like 30 of them, impeccably detailed,” Ms. Schuker Blum said. “She was like a libel lawyer’s dream.”

After graduating in 2005, Ms. Lessin completed an internship at The Journal, then kept coming back into the office to pitch stories. Eventually, she landed a full-time job covering personal tech, one of the least popular beats at the time. The year was 2005. BlackBerrys were the gold standard of smartphones and Facebook was just an online phone book for college students.

In 2008, Ms. Lessin moved to San Francisco to cover the tech industry — and regularly broke stories. “I was like, ‘Who the hell is this girl?’” said Paul Steiger, the Journal’s managing editor at the time. “I kind of followed her work and asked people, ‘Is she as good as this looks?’ And they said yes.”

But it was also around this time that some people began to whisper about Ms. Lessin’s possible conflicts of interest. Through Harvard, she had become friends with start-up founders or fast-rising executives at places like Google and Facebook, ostensibly her key subjects. She was also dating another graduate, Sam Lessin, who had started a company that would later be acquired by Facebook. (The two married in 2012.)

A holiday excursion in 2008 resulted in a scolding for Ms. Lessin. As the economy was plummeting, she and Mr. Lessin jetted off to the vacation home of his family on the island of Cyprus with friends of theirs from the start-up scene.

The group passed the time as many people do on vacation, drinking and lounging around the pool. And before filming such activities and sharing them with strangers would become commonplace on Instagram, they posted footage online, including the women wearing matching black-and-white checkered swimsuits, lip-syncing to Journey’s “Don’t Stop Believing.”

The Cyprus travelers were blasted for their stunning lack of self awareness as the nation’s economy teetered toward crisis and tech companies were laying off employees. Ms. Lessin was singled out by Valleywag, the now-defunct tech site, in a post headlined, “WSJ reporter parties in Cyprus with people she covers.”

“Oh, that never made sense to me,” she said. “These were not people I wrote about. These were friends.” (A scan of Journal articles from the period shows she interviewed at least one Cyprus attendee in an article — Mike Hudack, the head of Blip.tv, a video start-up that has since shut down. Ms. Lessin says they were not friends when she wrote the article.) Still, her vacation drew disapproving scrutiny from higher-ups at The Journal, though not an official reprimand.

Ms. Lessin, in turn, was beginning to chafe at how newsrooms were covering tech — from a cool remove, she thought, never going deep. In contrast were the many bloggers who could delve into the industry’s every incremental move, but who had become so close to subjects the stories read like ad copy. Ms. Lessin said she thought: Couldn’t you do both? In-the-know reporting that still held subjects to account?

“I knew if I didn’t do it, someone else would, and I’d be kicking myself,” she said.

Valley underminers like to snipe that Ms. Lessin never had to persuade investors to back her plan. She had her own money. Her father is Jerome C. Vascellaro, a partner at the private equity giant TPG, which is a significant investor in tech and media businesses like Uber, Vice and Airbnb. Her husband, a son of the late tech investor Robert H. Lessin, made a fortune from the Facebook stock he received as part of the company’s acquisition of his start-up years ago.

Ms. Lessin said she tapped her own bank account, using “less than $1 million,” to start The Information, and continues to own and control it wholly. She pays competitive salaries (albeit without equity) — as much as $180,000 or more for some top reporters. She refuses to spend more than she grosses, she said.

So far, this strategy seems to be paying off. A 2016 article on Tony Fadell, then the head of Google’s Nest division, exposed how the executive’s last-minute decrees and slow decision making had crippled the company’s hardware efforts. The story was so in demand it converted over 600 new subscribers in the first day, recalled the reporter who wrote it, Reed Albergotti, who worked at The Information from 2015 to 2019. “It blew up,” he said. “That was proof of the model.”

But is The Information — whose title anticipates an interest in nothing short of everything — just a trade publication, like Advertising Age or Publishers Weekly? (One heavily trafficked section features richly detailed organizational charts that executive recruiters mine for leads.)

Ms. Lessin, seeming a little annoyed by the question, tilted her head and widened her eyes as she computed her reply. “I think that misses the point,” she finally said. “There’s so much hunger for what we produce.”

In December, she introduced a consumer-friendly version of the site, an app called The Tech Top 10, priced at $30 a year. Instead of a dense story on Netflix’s debt structure, the app might publish a short explainer on Netflix’s price increase. “You’re matching the reader with the level of expertise they want,” Ms. Lessin said. “That’s what subscriptions allow you to do.”

She won’t say how many subscribers The Information has, but some back-of-the-envelope math suggests she’ll have to hit 40,000 paying readers by this year to reach her sales objective, which could be a significant challenge. According to three people familiar with the business, the publication surpassed 20,000 subscribers only around the middle of last year. “I can confirm we have more than that,” she said, declining to be more specific.

Her publication’s success has attracted suitors. Some time last year, John Ridding, the chief executive of The Financial Times, Britain’s pre-eminent business publication, met with Ms. Lessin in San Francisco. The salmon-colored broadsheet was interested in a possible takeover, three people familiar with the matter said. Mr. Ridding declined to comment, and Ms. Lessin said The Information was not for sale.

As at any start-up, the vibe at The Information’s open-plan offices is like a college dorm room that’s in the middle of being cleaned up ahead of Parents’ Weekend. A large part of the staff hails from The Journal, including Martin Peers, who used to be Ms. Lessin’s editor. Now, she’s his boss.

Mr. Peers, 59, is famous within journalism circles for his cantankerous nature and deep skepticism of Silicon Valley — and yet he came west. “I had been at the Journal for 15 years,” he said. “I was exhausted and what Jessica was proposing was the perfect antidote, and I thought, ‘Why not?’”

In June 2017, the site landed one of its biggest scoops: a feature that revealed sexual harassment allegations against one of Silicon Valley’s most well-connected venture capitalists. Six women had accused Justin Caldbeck, a partner at Binary Capital, of unwanted sexual advances, with three of them speaking to the reporter, Mr. Albergotti, on the record.

The story exposed a pervasive culture of misogyny and harassment within tech, immediately raised The Information’s profile and was a precursor of the broader #MeToo movement. But Mr. Albergotti, who now works at The Washington Post, remembered the staff’s anxiety as they got closer to publishing. They were keenly aware of what had happened to Gawker, which was sued for invasion of privacy by Hulk Hogan. The suit, which was financed by the venture capitalist Peter Thiel, drove Gawker into extinction and stoked a fear among publishers that anyone with enough money and willpower could vaporize a news outlet.

As the Caldbeck story was about to go to press, Ms. Lessin was in Italy attending a conference. She consulted the company’s liability insurance, which she had printed out, in her hotel room before heading to a dinner where she would be seated with Jeff Bezos. “I don’t remember if I vomited or not,” she said. “But I was very nervous.” She gave the green light.

Mr. Caldbeck didn’t sue. Instead, he resigned. A short while later, his venture firm collapsed. As a female entrepreneur, Ms. Lessin felt The Information’s work was “deeply personal,” especially as several men in the industry, who had heard the piece was in the works, contacted her to suggest the claims were overblown. These were “men I respect, who I was close to,” she said.

She wouldn’t name them. Ms. Schuker Blum, who worked with her at The Journal, said Ms. Lessin is not a gossip, like many reporters. “She’s not the journalist who’s always complaining,” Ms. Schuker Blum said. “She’s not a conspiracy theorist. She sees the best in people.”

Daniel Ek, the chief executive of Spotify, said he found the occasional, critical story on his company “not unfair.” But he added that Ms. Lessin “has to walk a tightrope given the level of access that she has. That’s got to be tough.”

Ms. Lessin’s connections continue to raise eyebrows, particularly those to Facebook. She and her husband are friends with their Harvard classmates Mark Zuckerberg, the company’s chief executive, and his wife, Priscilla Chan, who runs the couple’s philanthropy efforts. They attended each other’s weddings and both have young children. (Ms. Lessin’s two boys, Lion and Maverick, are both under the age of 3.) Mr. Zuckerberg was at The Information’s launch party, where she joked that for the super-high subscription rate of $10,000 a story could be killed (but just one). Recently, Ms. Chan was a speaker at an Information event.

The Information has published tough stories on Facebook, including a 2016 piece that revealed a weakness in its business. A more recent article exposed tensions between Chinese employees and Facebook’s leaders. But so far, it has only taken smaller swipes at the tech giant.

So how does The Information write about a company run by a friend of the site’s owner, one that is also perceived as having failed democracy, if not the universe?

Ms. Lessin was circumspect, her contralto voice echoing slightly off the glass walls of her office. “I’m very careful to draw lines around my personal life,” she said. “We have very clearly defined our culture around getting the best, most accurate story possible.”

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Child-Welfare Activists Attack Facebook Over Encryption Plans

Westlake Legal Group 05facebook-facebookJumbo Child-Welfare Activists Attack Facebook Over Encryption Plans Zuckerberg, Mark E Wray, Christopher A Social Media Photography Facebook Inc Data-Mining and Database Marketing Cyberharassment Computers and the Internet Computer Security Children and Childhood child pornography Child Abuse and Neglect

WASHINGTON — New opponents confronted Facebook on Wednesday as it moves forward with a plan to encrypt all of its messaging platforms: child welfare advocates who said that encryption would allow child predators to operate with impunity across the company’s apps.

“Facebook has a responsibility to work with law enforcement and to prevent the use of your sites and services for sexual abuse,” a group of 129 child protection organizations, led by the National Society for the Prevention of Cruelty to Children, said in a letter to the Silicon Valley company. “An increased risk of child abuse being facilitated on or by Facebook is not a reasonable trade-off to make.”

The letter indicates how activists and law enforcement agencies have seized on child exploitation as a new way to combat the expanded use of encryption in consumer technology.

The Justice Department and its counterparts in Britain and Australia previously used the threat of terrorist activity to rail against encryption, saying that tech companies were shielding malicious and dangerous criminals. But they have recently shifted their focus to child exploitation as tech companies have made good on plans to make it harder to see or stop illicit activity on those platforms.

In a statement, Facebook said, “Encryption is critically important to keep everyone safe from hackers and criminals.” The company said it was building safety measures for children and working closely with child safety experts.

“We have led the industry in safeguarding children from exploitation and we are bringing this same commitment and leadership to our work on encryption,” Facebook said.

Last March, Mark Zuckerberg, Facebook’s chief executive, announced that he planned to knit together and encrypt the company’s various messaging services, including WhatsApp, Instagram and Facebook Messenger. The products serve billions of people globally.

Facebook has been grappling with its role in the explosion of online child pornography. In 2018, tech companies reported more than 45 million online photos and videos of children being sexually abused. Facebook accounted for more than 90 percent of the abusive photos and videos that tech companies flagged that year. Once Facebook Messenger — the company’s main source of such imagery — is fully encrypted, it will be nearly impossible for Facebook to detect such images.

Tech companies said they had found other ways to combat abuse of their services, even if they introduce encryption. Those methods include scanning and matching the profile photos of users to those of known predators, as well as relying on user reports and complaints. WhatsApp, which is already fully encrypted, has said it bans more than 250,000 users every month for posting imagery of exploited children.

The scope and severity of online child pornography has grown exponentially along with the rise of social networks.

It is possible to find images and videos of children as young as infants being raped and abused online, and some services allow people to watch pay-per-view live streams of assaults of victims from around the world. Many victims live in fear of being recognized, thanks to the near impossibility of deleting these images from the internet.

It would take nearly every agent at the F.B.I. to pursue every child pornography lead that came into the bureau, according to F.B.I. and Justice Department officials who have fought to obtain information that companies like Apple say they cannot give because of the strengthened security in their products.

In a hearing with the House Judiciary Committee on Wednesday, Christopher Wray, director of the Federal Bureau of Investigation, also criticized Facebook on its encryption plans, calling it a “dream come true” for predators and child pornographers who use the services to traffic in illicit material.

“If Facebook moves forward with the plans that they have at the moment, we will be blinded,” Mr. Wray said. “They will blind themselves and law enforcement.”

Mr. Wray said Facebook should not be able to decide unilaterally to shut out law enforcement, leaving open the possibility that American lawmakers could try to mitigate the problem through legislation, as Australia has done. In 2018, the Australian Parliament passed a bill that required tech companies to provide law enforcement authorities with access to encrypted communications.

“Tech companies like Facebook have a vital responsibility to balance privacy with the safety of vulnerable children,” Priti Patel, the British home secretary, said in a statement on Wednesday. “We have also submitted detailed evidence to the U.S. Senate about these concerns.”

In a recent meeting with Sheryl Sandberg, Facebook’s chief operating officer, Ms. Patel said the social network’s encryption plans could not be allowed to hamper law enforcement’s ability to protect children online.

Facebook and other tech companies have received support for encryption from a coalition of civil liberties organizations, techno-libertarian groups and former national security experts, many of whom served in the Obama administration.

While many of these groups agree that there needs to be a balance between public safety and the privacy of people who use technology to communicate, they said encryption was a public good that helps ensure a safer world.

“The future of cybersecurity, robotics, communications and other technologies depends on better encryption,” said Ari Schwartz, managing director for cybersecurity services at Venable.

Law enforcement officials have long been frustrated by this argument. They said companies like Facebook and Apple did not encrypt parts of their services that would make it impossible for users to do things like reset their passwords when they forget them — a decision that keeps those products generally usable and appealing, and makes it possible for law enforcement authorities to see into services such as Apple’s iCloud.

The question, some law enforcement officials said, is why tech companies choose not to encrypt when it serves their bottom line, but choose to encrypt when it could harm public safety.

Katie Benner reported from Washington and Mike Isaac from San Francisco.

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Epoch Times, Punished by Facebook, Gets a New Megaphone on YouTube

Westlake Legal Group 00roose-facebookJumbo Epoch Times, Punished by Facebook, Gets a New Megaphone on YouTube Political Advertising Online Advertising Falun Gong Facebook Inc Epoch Times

SAN FRANCISCO — Late last summer, YouTube users began noticing a surge of ads for an obscure news outlet called The Epoch Times. One ad touted an exposé of “Spygate,” a baseless conspiracy theory alleging that President Barack Obama and his allies placed a spy inside President Trump’s 2016 campaign. Another praised Mr. Trump’s interest in buying Greenland as a shrewd strategic move. A third claimed that the opioid epidemic in the United States was the result of a chemical warfare plot by the Chinese Communist Party.

“Anyone else getting a lot of Epoch Times ads?” a user on a YouTube-themed Reddit forum wrote.

“Every other ad on YouTube is a commercial for The Epoch Times pushing Trump,” wrote a Twitter user.

The ads, which sometimes ran for several minutes apiece, were a potpourri of right-wing polemics wrapped in “subscribe now” appeals. They seemed to be everywhere, running alongside videos of pranks, sports highlights and gaming streams. They claimed that The Epoch Times was “America’s fastest growing newspaper” and that, unlike the biased mainstream media, it would provide readers with the unvarnished truth.

The Epoch Times is one of the most mysterious fixtures of the pro-Trump media universe. It was started 20 years ago as a print newspaper by practitioners of Falun Gong, the persecuted Chinese spiritual practice. In recent years, the paper has made inroads into top Republican circles. Mr. Trump and his advisers have shared Epoch Times articles on their social media accounts, and last year, Lara Trump, the president’s daughter-in-law, sat for an interview with an Epoch Times editor. Representative Paul Gosar, a Republican from Arizona, called it “our favorite paper.”

The outlet’s profile was initially raised by a spending spree on Facebook — where it paid more than $1 million to promote its content. But in August, Facebook caught The Epoch Times trying to evade its advertising transparency rules and barred it from taking out more ads.

Rather than retreating, the publication simply shifted to a different platform — YouTube — and continued its advertising blitz there.

The shifting tactics of partisan publishers pose a challenge to tech platforms in the lead-up to the 2020 election. Despite their efforts to limit the spread of misinformation, the platforms remain a powerful megaphone for publishers like The Epoch Times, which has used conspiracy theories and dubious growth tactics to expand its audience.

In all, the outlet has spent more than $1 million on YouTube ads, according to a person familiar with its spending, who discussed private information on the condition of anonymity.

In addition, data from Pathmatics, a social media analytics firm, suggests that The Epoch Times’s YouTube spending increased sharply in the months after Facebook banned its ads, and that its ads are reaching more people than many mainstream news organizations are. Gabe Gottlieb, the chief executive of Pathmatics, estimated that the outlet’s YouTube spending was “higher than household names like The New York Times, CNN, Fox News and The Wall Street Journal.”

In an email exchange, Stephen Gregory, the publisher of the English-language Epoch Times in the United States, declined to comment on its YouTube budget or the number of its subscribers. He characterized the YouTube ads as “profitable” and said, “We advertise on YouTube because the advertisements are effective at selling Epoch Times newspaper subscriptions.”

Little is known about The Epoch Times’s finances and organizational structure. The nonprofit Epoch Times Association, which operates it, reported $8.1 million in revenue and $7.2 million in expenses on its 2017 public tax filings. An investigation by NBC News last summer found ties between the outlet and other Falun Gong-affiliated organizations, such as the Shen Yun dance performance series and the video broadcaster NTD, and said the organizations “appear to share missions, money and executives.”

Three former Epoch Times employees, who spoke on the condition of anonymity because they feared retaliation from the organization, said the outlet had long been financed by subscriptions, advertising and private donations. They described its staff as primarily Falun Gong practitioners, many of whom had little previous experience in journalism. Editorial employees, they said, were encouraged to attend weekly “Fa study” sessions outside work hours, during which they would gather to study the teachings of Falun Gong’s spiritual leader, Li Hongzhi.

The Epoch Times has long denied having direct ties to Falun Gong. Mr. Gregory said that the organization was primarily funded through subscriptions and ads, and that “donations are a small part of our income.”

The outlet’s heavy spending online, coupled with its unconventional background and its charged partisan content, has raised eyebrows among social media watchdogs.

“It’s quite strange,” said Nick Monaco, a disinformation researcher at the Institute for the Future, a tech research group in Palo Alto, Calif. “You don’t expect a media outlet to do this big of a push around an election.”

Companies like Facebook and Google, which owns YouTube, have hardened their defenses to prevent another Russian-style influence campaign. But they have been more lenient with publishers based in the United States, out of concern that they will appear to be taking sides and stepping on the First Amendment.

That reluctance has set off worries about a rise in so-called domestic disinformation, and left a loophole for American organizations to push partisan messages with relative impunity. The New York Times reported last month that Russian trolls were already trying to exploit this loophole by buying Facebook pages from Americans in an attempt to influence the 2020 election.

There is no indication that The Epoch Times is coordinating with foreign entities, but its aggressive growth tactics have drawn scrutiny. Facebook cut off the outlet’s ability to buy ads after finding that it obscured the source of its spending. The social network also took action against TheBL, a network of Facebook pages that was promoted through fake accounts, many of which had profile pictures generated with artificial intelligence. Facebook said it had found connections between TheBL and Epoch Media Group.

Mr. Gregory denied that The Epoch Times was linked to TheBL. He said it had been started by the former head of The Epoch Times’s Vietnamese affiliate, with whom his paper had since cut ties.

The Epoch Times can no longer advertise on Facebook, but it can still post there. On Monday, it published a story containing unproven suggestions of voter fraud ahead of the Iowa caucuses. The story was later debunked by fact checkers, but it received tens of thousands of likes, shares and comments.

YouTube appears to be friendlier turf than Facebook for The Epoch Times. Google, the parent company, features stories from The Epoch Times in its Google News search results. And the company does not require news publishers to disclose their spending on political ads, giving an added layer of privacy.

A YouTube spokeswoman, Charlotte Smith, confirmed that the platform has a carve-out for news publishers in its advertising transparency rules.

The Epoch Times was formed in part to speak out against the Chinese government’s persecution of Falun Gong practitioners. Anticommunist China coverage is still featured prominently, but the publication has expanded to include a range of news, lifestyle and opinion pieces. Around the time of the 2016 election, it began running more articles supportive of Mr. Trump and critical of his opponents.

“I’m not exactly clear why they have become such a major pro-Trump voice,” said Haifeng Huang, a professor of political science at the University of California, Merced. “The reason may be multifaceted, but part of it is perhaps because they regard President Trump as tough on the Chinese government and therefore a natural ally for them.”

Mr. Gregory said, “We are independent and focus on truthful reporting, including on the Trump administration.”

Many ads for The Epoch Times appear to be aimed at older conservatives who have rejected the mainstream media as being too biased and left-wing. In one ad, two actors decide to buy subscriptions as holiday gifts for their parents. Another ad says the paper has just increased its font size by 20 percent.

That Epoch Times ad, a three-minute subscription appeal called “Truth, Tradition and Crosswords,” stars an employee, Roman Balmakov. Mr. Balmakov was previously the circulation manager; according to Mr. Gregory, he is now being trained as a video journalist.

“Are you tired of the media spinning the truth and pushing false narratives upon you?” Mr. Balmakov asks in the video. He goes on to explain that “while the mainstream media has been pushing the whole ‘Trump colluding with Russia’ narrative, The Epoch Times has been covering Spygate, the true story of collusion.”

The ad has been viewed more than 20 million times.

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